Toscafund's Savvas Savouri has no truck for despair over London's future as a financial center in the wake of the new UK tax on bank bonuses. In fact, the hedge fund chief economist sees London gaining at least 100,000 new financial services jobs over the next decade, thanks to growth of business from Brazil, Russia, India and China.
"The idea that London is going to be full of tumbleweed in 10 years is not credible," Savouri told the Financial Times. "We have an affinity with India, with the Gulf, even with China, via Hong Kong. These markets will want a western hub."
His views are a direct repudiation of the drumbeat of dire predictions from financial services industry figures sparked by the UK's new 50 percent tax on bankers' bonuses and hike in the income tax rate for high earners. Even Boris Johnson, London's mayor, warned that banks will shift thousands of jobs away from the city.
But Savouri says any negative impact from the tax will be dwarfed by the creation of new banking jobs serving emerging market business. For instance, if BRIC (Brazil, Russia, India, China) economies created as much new business in London as Japanese banks on a per capita basis, "the number of incremental jobs would exceed 180,000," he wrote to Tosca's clients.
London Will Thrive, Says Hedge Fund [Financial Times]
U.K. Bonus Impact Still Unclear, Myners Says [WSJ]
For Many Start-Ups, a Spot on the Nasdaq Is No Longer the Goal [NY Times]
Bonus Reform? Try Bogus Reform. [The Big Money]
Pin the Tail on Blankfein Is a Game Nobody Wins: David Reilly [Bloomberg News]