Iain Anderson, Cicero: The industry needs to watch the bigger picture

Clients must observe an array of global and supranational bodies to influence decision-making.

The dust has now settled on the UK party conference season.

Attended by legions of lobbyists and journalists - all hanging on the every breath, sentence or slip-up of politicians - you could be forgiven for thinking these circuses matter.

Back in 1996 when the Tories last held congress as the incumbent government, the policies and proclamations of the Chancellor and the Treasury team had a huge impact on the UK's financial services sector - affecting wholesale and retail, tax, investments, mortgages or pensions.

Although this most recent season saw eye-watering announcements on welfare, the simple truth is that the UK financial services sector is no longer totally shaped by UK politicians, far less the party conference floor. It's a world away.

This has huge repercussions for financial sector public policy and how the UK reacts. More than ever before, legislation and regulation is affected by what happens outside the UK. It is no good focusing on a single territory. The European Union is the dominant player for the UK, but you would be a fool to rest your gaze on Brussels.

The financial sector saw its recession begin in August 2007 when the US sub-prime market buffeted the entire world and the G20 in 2008 began the process of gathering a global response. We need to keep an eye on the bigger picture. Today, clients must carefully observe a staggering array of global and supranational bodies - from the G20 and the Financial Stability Board to the EU Commission, US Securities and Exchange Commission or Japanese Financial Services Authority - to understand which way the wind is blowing and, crucially, influence decision-making.

Take the recent hoo-ha over banking reforms instigated by the G20 and the Basel Committee in Switzerland. As a result of agreement brokered outside London, UK banks will be forced to hold minimum levels of capital reserves. This will have a seismic impact on financial institutions and, by extension, the wider economy.

It was estimated that the cost of bolstering Britain's bank balance sheets could be as much as £130bn following the G20 Toronto summit. With more proposals in the offing, all eyes should be firmly fixed on next month's meeting in Seoul, South Korea.

While there is global co-operation, there is also a real risk of protectionism developing as fiscal contraction bites. As a result of this, regulators in Europe and beyond are talking to each other more and more, day by day. The hotlines are quite literally buzzing. Co-operation is the lingua franca among politicians and bureaucrats.

Research launched by Cicero Consulting in the European Parliament just last month revealed that enhanced cross-border regulatory supervision was the top priority of European MEPs, and willing EU commissioners have been quick to oblige.

But what does all this mean for public affairs? In the post-financial crisis world, conventional approaches to financial services lobbying need to be jettisoned, and fast. Parochialism has never been so limiting. You need to have a joined-up capability with presence in the US, Asia and Europe if you are going to hope to stay on top of debates such as Basel III or rules on over-the-counter derivates and to iron out regulatory arbitrage across those centres.

If you want to stay on top of European regulation, you need to be in Brussels. If you want to influence US legislators, you need to be in the heart of the action in Washington. If you are going to cover Asia, you need an Asian capability. As ever, we always need to be where the policy-makers are.


- Which public sector budget cut is likely to be the toughest for the Government to push through?

Public sector pensions. The unions are NOT going to take this lying down.

- Who would make the better lobbyist - David or Ed Miliband?

David. I'm happy to take his call if he decides he wants a new career.

- Which public sector organisation has made the best case for ringfencing its budget or minimising any cuts?

The Financial Services Authority. While it is set to morph into a new set of regulatory agencies, its resources will continue to grow as a result of the crisis.

Iain Anderson is director at chief corporate counsel at Cicero

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