Banker Turned Lord Mayor of London Navigates Post-Brexit World
(Bloomberg) -- William Russell is the 692nd person to don the ceremonial robes of the Lord Mayor of London. As ambassador for the U.K.’s financial services, he’s spending his year in office trying to steer the sector through one of its most wrenching periods.
“We’re looking forward and not back,” Russell, 54, said in an interview Friday, the day the country departs the European Union more than three years after a nationwide referendum endorsed leaving. “I say that personally as a remainer, but I say also that I’m not a remoaner.”
The decision has dominated British politics, with Brexit opponents dubbed “remoaners” by their rivals. Under the terms of a withdrawal agreement, the U.K. now enters a transition period, due to end in late 2020, during which the rules governing the relationship with the E.U. remain the same. It’s what comes next that’s keeping Russell and his team busy.
“I’m optimistic but realistic and there is a challenge to get things done by December,” he said referring to ongoing negotiations between British and European governments over terms of the future relationship. “We need to try and carry everybody with us to make the U.K. as successful as it can be.”
Operating from the 18th century Mansion House across the road from the Bank of England, Russell sits in the middle of the City of London, a square mile of banks, brokers, lawyers, accountants and insurers. The U.K.’s financial and professional services industry employs more than 2.3 million people and is the largest tax payer, according to advocacy group TheCityUK.
For the sector to retain its preeminence, it would be best for the U.K. to remain close to European rules after the transition period ends, he said over tea and coffee served from bone china engraved with his office’s insignia. That would increase the likelihood of gaining a status called “equivalence” or something similar, whereby U.K. services can continue operating in Europe with minimal interruption.
That status is set by European leaders and can be unilaterally withdrawn after 30-days notice, making it problematic for businesses looking for certainty. Switzerland learned that the hard way in 2019 when the EU removed the designation for the country’s stock market, causing confusion among traders.
Some senior policy makers and Brexit backers want the U.K. to forge a new direction, eschewing equivalence in favor of something tailored to the country’s supposed strengths even though that could risk a major rupture with Europe and possible economic recession. One idea has been so-called Singapore-on-Thames with low tax, light-touch regulation modeled on the former British colony.
“That would be quite out there,” Russell said about going down the Singapore route. “I think we want to work with our friends in the EU because, yes, we’ve left the EU, but we’re still in Europe, a part of the European area, and I think that there are opportunities.”
The former Merrill Lynch investment banker is optimistic the talks with European leaders will go well. “We’ve got to go in with that view that the EU need us and we need the EU,” he said.
While Brexit will continue to dominate the headlines, Russell is using his year-long tenure to emphasize green finance and fintech as areas where London is building an advantage over its rivals. The certainty introduced by the recent election result has strengthened the city’s appeal.
“I actually count myself incredibly lucky that the election was in December and what happened happened because it’s made my life a lot easier,” he said, referring to the clear majority secured by U.K. Prime Minister Boris Johnson. “That clarity is something that is very important to all those who are putting money into the U.K.”
He says this charm offensive is aided by the unique strengths of the U.K. financial sector.
“The liquidity pool is here,” he said. “All the people I talk to don’t want to move to Frankfurt, Paris, Dublin, Luxembourg, Amsterdam because this is where it happens. The ecosystem here is so unique and so powerful, you can’t replicate it, in my view, anywhere else.”
Other assets are more tangential, he said. The City of London Corp. -- the area’s governing body that the Lord Mayor sits atop -- is the fourth-biggest funder of heritage and cultural activities in the U.K. That’s good for business.
“It’s actually the biggest differentiator this city has,” he said. “New York is a great city, but when it comes to the culture and arts and attracting talent, people want to still come here.”
Russell’s role involves about 100 days overseas on trips to more than 20 countries and greeting perhaps thousands of people. While grueling, the prestige and perks -- such as living in Mansion House and meeting royal visitors -- help make the ceremonial position highly sought after.
The office’s history stretches to the 12th century and in all that time, just two of the Lord Mayors have been female. Its holders have overwhelmingly been white and male and the interview process for the mayoralty has come under additional scrutiny after the Financial Times reported in January that a gay candidate had been grilled in 2018 over his sexuality.
Russell -- the fifth member of his family to hold the post -- confirmed a review of the selection process is underway and declined to comment further until its completion.
“There will be changes that will be made, but it wouldn’t be right for me to comment until the recommendations come out,” he said. “We know we’ve got to do better. Everyone knows that.”
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