Finance and investment

Wealth (and poverty) are relative concepts. Despite its relative economic decline, Britain is still one of the wealthiest places in the world. The empire has gone, the great manufacturing industries have nearly gone, but London is still one of the centers of the financial world. The Financial Times-Stock Exchange Index of the 100 largest British companies (known popularity as the “Footsie”) is one of the main indicators of world stock market prices.

The reason for this is not hard to find. The same features that contributed to the country’s decline as a great industrial and political power – the preference for continuity and tradition rather than change, the emphasis on personal contract as opposed to demonstrated ability when deciding who gets the important jobs – are exactly the qualities that attract investors. When people want to invest a lot of money, what matters to them is an atmosphere of stability and feeling of personal trust. There are the qualities to be found in the “square mile” of the old City of London, which has one of the largest concentrations of insurance companies, merchant banks, joint-stock banks and stockbrokers in the world. As regards stability, many of the institutions in what is known as “the City” can point to a long and uninterrupted history. Although there have been adaptations to modern conditions, and the stereotyped bowler-hatted “city gent” is a thing of the past, the sense of continuity, epitomized by the many old buildings in the square mile, is still strong. As regards trust, the city has a reputation for habits of secrecy that might be thought of as undesirable in other aspects of public life, but which in financial dealings become an advantage. In this context, “secrecy” means “discretion”.

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