October 19, 2007. Shanghai campus - The Right Honorable Lord Mayor of the City of London, Alderman John Stuttard, was today named Honorary Board Member of the CEIBS-Lujiazui International Financial Research Institute. CEIBS President Zhu Xiaoming presented the award during a visit to the school by the Lord Mayor and his delegation which included Lance Browne, senior advisor to the City Of London and vice chairman of Standard Chartered Bank (China).
"We sincerely hope that Mr. John Stuttard and other colleagues from the City of London will continue to show valuable support for the CEIBS-Lujiazui International Finance Research Center in the future," said President Zhu. The award will be passed to the British city's successive Lord Mayors.
In accepting the award, Lord Mayor Stuttard stated that he and his successors would do their best to promote the development of the Center in the coming years. The CEIBS Lujiazui International Finance Research Center, which hosted its first event earlier this month, will serve as a think tank for Shanghai with a focus on assisting the city in its development into an international finance center. According to President Zhu, the Center will also provide consulting services to assist the government in making finance-related decisions, serve as a high-end platform for financiers to exchange ideas, and provide first-class research results and training for financial institutions.
"The Center will host the CEIBS Lujiazui Financier Salon Series, which will invite top financial experts, senior government officials or business leaders at home and abroad to voice their opinions here on a monthly basis," said President Zhu. "It is positioned as a high-level, exclusive, and closed-door meeting space for financiers to speak their minds and exchange their thoughts freely."
Lessons from London
The presentation of the honorary award was followed by the Lord Mayor's address on "How the City of London succeeded in the international financial market," in which he drew upon his decades of business experience to create a "roadmap"that can be followed by other international cities.
The vital elements of the "staggering success story" that led to London's rise to become "the world's leading international finance centre," said the Lord Mayor, include an open market and a favourable regulatory environment that relied on principles rather than a checklist of regulations. "Stringent rules adversely affect the financial service industry, whereas principles, if adhered to, encourage development," he told an audience of more than 200 CEIBS faculty, students, and members of the media.
The Lord Mayor drew parallels between London and Shanghai, comparing the increasing opening up of China's financial capital's economy to the steps the British capital took in the past. He recommended, however, that in its quest to become a global financial center, Shanghai should focus on:
• decreasing the red tape faced by wholly owned foreign enterprises applying to become licensed brokers;
• continued cooperation with international partners in order to manage increasingly intertwined global regulations for the financial sector; and
• addressing the global shortage of finance-educated professionals.
Tracing the changes back to the "Big Bang" (the Thatcher administration's market deregulation in response to the fallout from Black Monday in 1997), the Lord Mayor gave examples of the steps London took to open up its markets to an influx of foreign investment: first allowing foreign companies to freely enter the market; second, not restricting the categories in which foreign companies can buy; third, welcoming foreign investors.
Other factors that are vital to successfully becoming a financial powerhouse, the Lord Mayor said, include guaranteeing physical and financial security to investors. "Essential to the success of any financial center are the basic values of integrity, trust, honesty, fairness and equity," he said. "These are cultural issues, and difficult to learn, but you here in Shanghai understand these values." Shanghai, he said, has a bright future ahead.
The three-hour ceremony, chaired by CEIBS Vice President and Co-Dean Rolf Cremer, also featured a presentation by Standard Chartered's Lance Browne on "The strategic implications of state capitalism" and closed with a Q&A session with the audience. CEIBS students posed questions on hot topics ranging from the global impact of the U.S. sub-prime mortgage crisis to London's reaction to the Central Bank bailout of investors in the Northern Rock building society, as well as a wider look at the international capital markets.
