Michel Pebereau:Building a global finance hub

08:25, April 16, 2010      

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Michel Pebereau, born in 1942, is Chairman and former Chief Executive Officer of BNP Paribas. He graduated from the ecole Polytechnique in 1965 and held various positions in France’s Ministry of Economy and Finance before going into banking.

World Expositions have become an important platform to exchange innovative ideas, display historical experience while looking to the future, and to anchor economic, scientific, technological and cultural exchanges. Strong of a rich and ancient civilisation, China has been at the heart of international exchanges. Due to its remarkable economic development over the past thirty years, Western eyes see China as a fascinating country and a major centre of interest. The impact and the visibility of Expo 2010 will be considerable, not only in China but throughout the world. The choice of Shanghai for this exhibition also reflects the support and confidence of the international community in China’s reforms and its opening-up. It expresses our high expectations and our confidence in China’s future development. In this vein, I am pleased to observe that, French authorities have been the very first ones to confirm their participation in the Expo, hence symbolising their commitment to this event.

The theme“Better City, Better Life”embraces universal concepts. Looking towards the future and caring about ways to improve living conditions, it evokes sustainable development, biodiversity, diversity, technology and well-being. It reminds us that we are living in a fast changing world, more global than ever. This echoes the motto chosen for our group --“A Changing World”, a world filled with challenges and opportunities.

Our group is particularly keen in this Expo for a number of reasons. The relationship between BNP Paribas and Shanghai has always been quite distinctive. The group’s presence in China can be traced back to 1860. At the time, the Comptoir d’Escompte National chose Shanghai to open its first Asian office. I am delighted that we will celebrate BNP Paribas’150th year of presence in Shanghai in 2010. Given our long term commitment to China it is no surprise that the International Bank of Paris and Shanghai, formed in Shanghai in 1992, was the first Sino-foreign joint-venture bank in Shanghai. Nearly twenty five years later we have been able to convert our branches throughout China into wholly owned branches of BNP Paribas (China) Ltd. In this context, it is no surprise that we have also decided to register our headquarters in Shanghai.

Personally, I have had the pleasure to be closely involved in matters of importance for Shanghai, as I have been serving as a member of the International Business Leaders’Advisory Council for the Mayor of Shanghai since 2004. This forum has offered a unique opportunity to witness, over time, the pace of development of the city and to assess its great potential to establish itself as a world-class capital and major financial centre.

Despite the harshness of the financial and economic crisis, Shanghai is speeding up its efforts to build an international financial centre. The support and determination of the central government is a helpful support to that endeavour. I have no doubts that the Expo will reinforce the status of Shanghai not only as an international city, but also as an international financial centre. The global index of financial centres, carried out every year for the City of London, shows that Shanghai has consistently been one of the top three centres expected to become more significant in Asia. In addition, there has been a clear increase in the number of mentions in 2009. I am confident that this trend will be confirmed next year.

Expo 2010 is a unique opportunity to speed up Shanghai’s development as an international centre. From a seasoned banker’s perspective, my advice to Chinese authorities would be to offer an environment complying with international standards in terms of finance, regulation or fiscal rules. Some consequences must also be drawn from the financial crisis. First of all, in a competition with other global centres, a clear and stable legal framework is crucial. As a consequence of the past excesses, international investors will increasingly seek safe and predictable regulatory frameworks. Secondly, G-20 shows us that rules will be increasingly global in concept. While their application will be adapted according to different regions in the world, it will be essential to play the game and to enter into a new regulatory era. In contrast to past beliefs, regulatory arbitrage will no longer be perceived as an asset. On the contrary, it may be perceived as a financial centre’s weakness. Thirdly, the financial crisis has demonstrated the importance of ethics for financial market’s actors. To be sustainable, a financial centre must be built on the rationale of preventing abuses, rather than fixing them. Such wise strategy might not lead to quick wins. However, it has proved to be most successful over time. Lastly, the financial services industry must be encouraged to be pro-active. It should organise itself, draw its own rules or best practices when a need is identified, and apply them.

At the same time, the establishment of a world-class financial centre also requires attracting top-notch talent. A comprehensive strategy would help Shanghai to rise to the challenge. In my view, this requires two complementary approaches. On the one hand, Chinese talent should be trained and developed. Turning Shanghai into an education hub, with high quality research and distinguished professors would attract the best candidates. On the other hand, the city should have incentives in place to attract talent, in a city complying with international standards. Diversity must also be part of the picture, as a financial centre is a genuine microcosm. It is composed of banks or insurance companies, as well as lawyers, auditors, advisers, engineers, IT specialists, restaurants and sport centres! It is therefore important to cultivate a diversity of talent.

From my frequent travels to Shanghai, I have experienced that this is a vibrant city, and China’s most cosmopolitan city. The Expo will reinforce its status as International city. Its emblem, inspired by the Chinese symbol“the world”, reminds us that the city is a window opened to the world. Back in 1889, the success of the Paris Exhibition went beyond possible expectations at the time. Nowadays, the city still treasures a number of architectural legacies, such as the Eiffel tower, visited every year by millions of tourists. I am convinced that Shanghai will enjoy this year a similar success and wish the Expo 2010 the best of luck.

Source: Expo2010

(Editor:石希)

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