MARK TENNANT'S SPEECH AT THE INNOVATORS 2009
October 30, 2009
In his first speech as Chairman of Scottish Financial Enterprise (SFE), Mark Tennant addressed an audience of industry representatives at the organisation's annual dinner and Innovators Awards in Edinburgh on Thursday 29 October, 2009. Mark Tennant said:
John Campbell
"Let me start by paying tribute to my predecessor John Campbell. John did a remarkable job over five years. Together with Owen and his team John developed SFE into the highly visible and effective representative body it now is. It is to John's everlasting credit that he appreciated the big change that occurred a few years before he took over the Chairmanship.. That change was devolution and he was astute enough to realise that one of SFE's roles in the post devolution world was to act as the industry's interface with devolved government and the Scottish Parliament, in addition to our well-established links with Whitehall and Brussels. He was a prime mover in the establishment of the Financial Services Advisory Board (FiSAB), the innovative working group of industry, government and others, chaired by the First Minister. May I also pay tribute to the First Minister at the time, Jack McConnell, for recognising the need for such a body. Paradoxically the other event which John grappled so ably with was in the crisis which followed the Lehman bankruptcy. In what was an incredibly difficult environment he brought balance to a debate which became highly polarised - John thank you!
Reputation
" The other day I was listening to the radio and heard Magnus Linklater refer to Edinburgh as "holed below the waterline. "Frankly shame on you Magnus, as an ex editor of the Scotsman and a shrewd commentator you should know better!". Ladies and Gentlemen Edinburgh is not holed below the waterline nor is Scotland. It is true we have very serious problems in the banking sector to which I will return later but the industry here is far wider than the banks. We have three extremely successful life companies of global scale who are all thriving. One of them was brought back from difficult times by Sandy Crombie who richly deserved the knighthood he was awarded this year.
" The fund management sector is thriving and highly successful. Our asset servicing industry, a much newer industry, contains all the leading global names who have found the culture and pool of talent conducive enough to become major employers up here. So Luxembourg and Dublin, "We are right up there with you!!!" On top of all that there are the professionals and other service providers i-- accountants, lawyers, IT and software providers. I have not even mentioned my alma mater Bell Lawrie, now Brewin Dolphin and all the other wealth managers up here. With this sort of line up how on earth can we be holed beneath the waterline???.
SFE's role
" Let me now briefly lay out the road SFE intends to travel in future. . Our primary role is to represent our members, and I see us doing that in three ways in the year ahead:.
" First, we have a role in representing our members' interests to governments, a role that is particularly important now, when so many decisions are being made on our industry at UK, European and international levels. And we of course also have good working relationships with the Scottish Government And here let me say something about our policy towards matters political. In common with all the changes in devolution which may happen in the future, it is not the role of SFE to comment on the whether the extension of devolution is a good or a bad thing or indeed on any of the political factors which underlie any change. But it is our job to ensure that both the politicians and the electorate are aware of issues which result from any policy changes. Where those changes harm - or help - our industry we have duty to explain and to inform, based only on the facts. Where those facts are presented to us, we will respond.
" We also have a role in interfacing with regulators here and in Europe to ensure our members; interests are upheld. For the most part this means singing loudly from the same hymn sheet as the UK trade associations as we have been doing over the draft EU directive on alternative find managers.
" Secondly we have a role in ensuring that the various levels of government continue to make Scotland a place where our members can expand and thrive and also where we can attract new firms to come a\and set up here.
" Which brings me to the final point in our strategy -: education. Here I am talking about three things:
- Ensuring that the pool of labour continues to have a high level of education which allows our firms to recruit from the best in the world.
- Secondly, I think we need to lead the way in persuading our firms to be in the vanguard of changing the way we communicate with the retail investor and do so in clear language, cutting out the unnecessary complexities and using plain English.
- And thirdly we need to be working far more with schools and universities not only to raise the level of financial education, but also to reinstate the view that we are a great industry to work in.
Banks
" Let me turn finally to the banks. We do have a problem in our banking sector. The government is a major shareholder in both of our major Scottish banks. . As a representative body we are ready - and proud - to support all our banking members and in that respect to carry on John's good work. . But let's stop bashing banks and bankers. Banks are central to the economy. They have been since Venetian days and the time of Mionte Pasci Di Sienna. We need banks. Companies need banks. People need banks. Terrible mistakes have indeed been made but let's now try to rebuild our banking sector and to stop kicking it when it is down.
" There are currently many influential voices who would like to restructure the banking industry along the lines Professor John Kay has suggested. That we should separate retail deposit taking from wholesale banking - a sort of latter day Glass Steagal. Ladies and Gentlemen this would be disastrous for the regeneration of the economy because by definition it would make capital more expensive not less and it would still leave a wholesale banking sector, which, in the end, if it went under would still have to be supported by the tax payer. This does not mean to say that we do not need to change. Of course we do. We need to carry more capital against risky assets. We need to price risk better and we need to pay heed to the electorate‘s view on remuneration. Most importantly, these changes need to be on a global and not a national basis.
" This is a long and complicated debate and not one for tonight but it matters hugely to the future of our institutions and to our SMEs and the public at large.
Asia
" But perhaps the most important message is one of optimism that we need to be outward looking, and rather than heeding the early 20th century epithet "Go West young man!". We need to turn through 180 degrees and look East. But be warned - it is a big challenge. Having just come back from Asia yesterday I can tell you that the growth opportunities are not now in the US or Europe, but in Indonesia, China, Korea and India. The shift eastwards of wealth and influence has become a cliché and we all think we recognise it. But it is much greater and swifter than many of us have realised. It is not just a case of opening an office somewhere east of Tehran. The opportunity is perceived by many in Asia to be - in Asia. So we cannot let ourselves be out of that loop.
" Some of our members are of course already well-established in those markets, but it will be a tough job to maintain and build business there, and one we cannot afford to ignore.
" Again let me thank you for coming and making this event such a success. And that's before we've seen the winners of Scotland's Innovators Awards! Have a great evening."
