What future for London?

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What future for London?

London's future as a financial centre is not threatened by the Labour Party, European economic and monetary union or the pusillanimity of the London Stock Exchange board. But it will certainly be affected by all these things.

London's future as a financial centre is not threatened by the Labour Party, European economic and monetary union or the pusillanimity of the London Stock Exchange board. But it will certainly be affected by all these things.

The Labour Party (which, polls suggest, will win the next general election due by May 1997) has plans to improve financial regulation. It also wants to stretch - by legislation, codes of practice or example - the time-horizon of investors and the end-users of capital.

The Labour leadership says this is a question of culture: investors and companies are already adjusting their views on short-termism and corporate governance, in reaction to the 1980s.

But Labour's plans for financial supervision are worrying. Although Labour policy-makers insist they won't spoil the party, behind the scenes they are pressing for features that would distinguish their reforms from what the Tories might do. No-one denies that London financial regulation needs a face-lift, and Labour at the moment sounds like a party the City can do business with. But some doubters predict that, after an election victory, a few socialist hobby-horses will be hauled back out of the toy-cupboard (see article beginning on page 62).

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