Professor Michael Moore, Warwick Business School, gives his thoughts on the UK easing rules for Chinese currency and banks. Professor Moore researches international foreign exchange markets.
He said: “This is a good move by the Chancellor for London to retain its status as the world’s centre for foreign exchange trade. London has 40 per cent of the foreign exchange trade. The next is New York with 20 per cent and after that no other centre has above 10 per cent.
“The Chinese are trying to internationalise their currency and the RMB is a growing market. Hong Kong has been aggressively stealing markets from London, for instance London has been the centre of wine trade for 1,000 years but that has now moved to Hong Kong and they did that in just three years.
“If Hong Kong gets the US dollar/RMB market then other trade will gravitate there as well. London has the infrastructure in place and making things easier for the Chinese banks will help keep that market in the UK capital. There might be concerns that the Chinese banks, which are mainly state-owned, are not as well regulated, but they will be trading in RMB and given the importance of the market this is a compromise worth taking.”