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What’s Wrong with London?

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For some time I have followed the case of media baron Conrad Black with great interest. Today in the Guardian is an interesting piece by Nick Cohen, reminding us why the London Stock Exchange remains the preferred destination for Russia’s IPOs. Guardian: Guilty or not, Conrad Black points to the sickness in our City

Americans take capitalism far more seriously than Europeans do. On the one hand, there is less class envy of wealth. On the other, prosecutors pursue those who allegedly break capitalism’s rules with a determination we never see in a Britain where serious fraud prosecutions are rarer than a rain-free Wimbledon and, unblushingly, ministers boast that ‘light touch’ policing of the City is making all of us rich. I hate to say it, but they’re right. No one can deny that Labour’s refusal to impose strict standards has allowed the City and London to boom while Wall Street and New York stagnate. Taxes on financial services have helped pay for the explosion in public-service jobs and welfare payments of the Blair-Brown era. But as everyone says, there’s no such thing as a free lunch and the price Labour is paying for the new tax revenues is a weakening commitment to the rule of law. When British NatWest bankers are accused of participation in the Enron fraud, American rather than British investigators put them on trial. When BAE is accused of corrupt dealings with the Saudi Arabian royal family, the US Justice Department investigates while Labour’s attorney general orders the British Serious Fraud Office to back off. How soon will it be before the combination of ‘light touch’ policing and a glut of money produces a British Enron, a homegrown City fraud that dwarfs the alleged crimes of Conrad Black?