Search This Blog

Wednesday 29 January 2014

Ernst in the London City

Last weekend, I paid a short visit to London with my wife Olga.

We had booked a cheap ticket at a Dutch auction site and off we went, last Friday evening. After a nightly bus drive and after the ferry trip from Calais to Dover, we had the whole Saturday in front of us for being in the London city.

My wife had never been to London and my last (and first) visit had been in 1986. We were in for a sort of culture shock.

The British Parliament and the Big Ben
Ernst in the London City
Picture copyright of Ernst Labruyère
Click to enlarge
Although the heart and the classic landmarks of the city (Piccadilly Circus, Whitehall, the Big Ben and Buckingham Palace) were all still there, a number of new landmarks had showed up in the city.


The Shard
Ernst in the London City
Picture copyright of Ernst Labruyère
Click to enlarge
The most prominent new landmarks were the Shard and the Gherkin: two radically designed and (for me) extremely beautiful buildings. Still, you could argue whether the Gherkin, and the other highrise buildings close to it, didn’t detonate next to the older, much lower buildings below them. 

Of course, beauty is in the eye of the beholder and some people might find that these new buildings fit in perfectly.

The Gherkin and other highrises near Fleet Street
Ernst in the London City
Picture copyright of Ernst Labruyère
Click to enlarge

What is more important, however, is that these impressive new highrise buildings and the other highrise buildings on Canary Wharf mostly belong to banks, insurance companies and other financial institutions.

These landmarks stand there to witness about the importance of the financial industry for the London City. Hardly any politician, who enters the House of Commons, will be able to oversee those landmarks and the industry they represent.
One of the newly built highrises in the London City
Ernst in the London City
Picture copyright of Ernst Labruyère
Click to enlarge

The London City is the undisputed heart of the European financial industry. In spite of the fact that Frankfurt hosts the ECB and the head offices of the most important German banks, there is no doubt whatsoever, which city is the topdog in financial Europe: London.

The London City skyline at night
Ernst in the London City
Picture copyright of Ernst Labruyère
Click to enlarge
London is the city where the brightest financial wizards and the hardest working bankers meet each other and earn billions of Euro’s, in deals that stretch across the whole financial spectrum; from stocks and fixed income to derivatives and gold.

People in the London City work hard – often too hard – and they have to deal with pressure – often too much pressure – to stay in their job. At many occasions these bankers operate close to the edge of ‘legal banking’ and sometimes they skim over it: f.i. during the recent Libor-gate scandal and other financial scandals.

The London City skyline at night
Ernst in the London City
Picture copyright of Ernst Labruyère
Click to enlarge
The winners celebrate their success and fortune on the (in)famous ‘bonus day’ – the day when the annual bank bonuses are paid out – by throwing money around like Christmas candy and by spreading their vast wealth all over the city.

And the losers of this system?

A few months ago, there was the story of the German banking intern Moritz Erhardt, who worked himself to death at Merrill Lynch, while trying to keep up with the pace.

And during the last two days, both the German banker Bill Broeksmit – former risk manager at Deutsche Bank – and Gabriel Magee – an American banker of JP Morgan – committed suicide: Broeksmit by hanging himself in his London home and Magee by throwing himself from the 33rd story of the JP Morgan office building.

Were they two victims of this London-based world of splendour and fast money? Or did they commit suicide for personal reasons?!. Their reasons for doing so will probably never be disclosed, but the constant working pressure and stress might be one of the causes for their untimely end.

Still, whether you like it or not, the London City is of the utmost importance for the United Kingdom. To show you just how important and extraordinary the London City is for England, here are two charts based on 2012 data by the British Office for National Statistics (ONS).

Gross Value Added per region to the English GDP (2012)
Data courtesy of: www.ons.gov.uk
Chart by: Ernst Labruyère
Click to enlarge

Gross Value Added per capita per region Data courtesy of: www.ons.gov.uk
Chart by: Ernst Labruyère
Click to enlarge
To give you an impression: the London City alone yields 22.35% of the whole British GDP – based on the 2012 ONS data. Most of this impressive percentage comes undoubtedly from the financial wizards in the City. Without the City, the GDP per capita of England would only be €22,516, against €26,544 including London.

This is the reason that British PM David Cameron continually argues with the EU, in order to preserve the privileges and special financial regulations for the London City. Not only against the EU and ECB regulators, but also against the competition in Frankfurt, Paris and Amsterdam, who all want their share of the vast financial pie.

By itself, I cannot blame Cameron for doing exactly that, as it would be very unwise from him to let his most important cash cow being slaughtered.

The big disadvantage of Cameron’s strong focus on the London City, however, is that the rest of the United Kingdom – traditionally a strong and versatile industrial nation – is clearly lagging in comparison with the competition in f.i. Germany, Italy and France. In production quantities, as well as in the quality of many of their products. 

Besides that, Germany, France and Italy are all countries with a clearly higher GDP per capita, when London would not be part of the equasion for the UK.

Ernst in the London City
Picture copyright of: Ernst Labruyère
Click to enlarge
Still, London – although we were there for only one day – made an unforgettable impression on both Olga and me. This is the reason that I share this (not so economic) blog and a few pictures from our short, but impressive trip to the financial centre of Europe. 

2 comments:

  1. Lovely city and nice review of it...Haven't seen the Shard yet. But i actually prefer the older buildings but London has a great mixture of both (old and new) in every aspect of the city.

    ReplyDelete
  2. I actually agree with you: this partially ruined the historical city. Nevertheless, London at least chose to develop beautiful buildings and not only 'cardboard boxes', like so many other cities did.

    ReplyDelete

Blogoria.de

Blogarchief