London eyes partnership with Turkey’s business sector
This headline caught my eye in our English language daily yesterday. Coincidentally I have been reading a fascinating book about the world of offshore finance (why hadn’t I read it before?), and how it screws the world in the interests of corporate bankers and their cronies.
On the face of it, you might think Turkey should be happy to have “London” taking an interest in their economy. But the truth is – this guy doesn’t represent London at all. His clients are the shady world of international finance and the mega-rich. This is an excerpt from the news item, followed by a few relevant quotes from Nicholas Shaxon’s book, Treasure Islands:
London wants to be a partner of growth in Turkey’s business sector, said Lord Mayor of the City of London Charles Bowman.
Bowman said he is excited about visiting Turkey this week and has five objectives during the visit.
They include providing reassurance that in the context of Brexit, London and U.K. financial and professional services will remain preeminent and to enhance the strong ties between Turkey and the U.K. built over a number of years.
Bowman said the other objectives are to develop, harness and leverage bilateral opportunities in trade, investment and business, innovation in financial and professional services and engaging with Turkish communities and businesses with relation to Business of Trust—a program run by the Lord Mayor of London.
Underlining that as Lord Mayor of London, he is acting as the U.K.’s principal spokesperson for and on behalf of the U.K.’s financial and professional services, Bowman said those services employ 2.3 million people across the country.
“The sector is home to and houses 250 banks within London itself, more than any other international financial center. [London] is a national, European and international jewel,” he said.
“We have a strong relationship with Turkey built over a number of years. And this visit… there is no sense of accident behind the fact that we are traveling to Turkey. We scheduled early in my year, and I am really looking forward to leveraging, developing and harnessing those opportunities to further grow what is already a strong relationship,” said the Lord Mayor.
Extracts from “Treasure Islands: Dirty Money, Tax Havens and the Men Who Stole Your Cash”, by Nicholas Shaxson
Few British people, let alone anyone else, know that the City of London is the most important financial center in the global offshore system. London provides endless loopholes for U.S. financial corporations, and many U.S. banking catastrophes can be traced substantially to those companies’ London offices.
Another important role for London has concerned a seemingly arcane practice known as “rehypothecation,” a way of shifting assets off banks’ balance sheets. The U.S. has firm rules to curb the abuses, but London does not—so ahead of the latest crisis, Wall Street investment banks simply went off to London where they could do it without limit. A little-noticed IMF paper in July 2010 estimated that by 2007 the seven largest players in the market—Lehman Brothers, Bear Stearns, Morgan Stanley, Goldman Sachs, Merrill/BoA, Citigroup, and JPMorgan—had shifted $4.5 trillion off their balance sheets in this way. So this London-based practice injected trillions more debt into the financial system than would otherwise have been the case. The City of London and Wall Street banks got rich off this—and ordinary Americans will pay for it for years to come.
[The City of London has a] kind of money-laundering filter that lets the City get involved in foreign dirty business but at sufficient distance to minimize the stink.
“In America they send hundreds of people to jail: in this country bankers don’t go to jail,” explains the British author and publisher Robin Ramsay. “There are no consequences in London.” Though Americans may roll their eyes at this, as they consider the financial crimes that have gone unpunished at home in the wake of the latest financial crisis, there is no doubt that London’s tolerance for abusive or criminal financial behavior is in a class of its own.
The head of the Corporation of London is the Lord Mayor of London—not to be confused with the mayor of London, who runs the much larger greater London municipality that contains the City, geographically speaking, but has no jurisdiction over its nonmunicipal affairs. And this separation of powers matters.
When the Queen visits the City, she stops at the boundary at Temple Bar and waits for the Lord Mayor of the City, accompanied by assorted City Aldermen and Sherriffs. This tourist ceremony, in which the Queen touches the Lord Mayor’s sword, strikingly highlights the political discontinuity between the City and the rest of Britain. When heads of state visit Britain the Lord Mayor throws more lavish banquets than the Queen. Each year the Chancellor, Britain’s finance minister, makes a speech at the Guildhall, the seat of City government, and at the Lord Mayor’s Mansion House, in which they justify how they have been serving the interests of finance.
In 1937, Britain’s then prime minister Clement Attlee became one of few politicians to have raised the issue. “Over and over again we have seen that there is in this country another power than that which has its seat at Westminster [the parliament]. The City of London, a convenient term for a collection of financial interests, is able to assert itself against the Government of the country.”