23/07/12

Commenting on Professor John Kay's review of UK equity markets and long-term decision-making, John Longworth, Director General of the British Chambers of Commerce, said:

"John Kay is right to highlight short-termism in the City as a brake on parts of the wider economy. Short-term behaviour on trading floors limits the availability of capital for growing companies, and for crucial investment in the UK's infrastructure. The City is an important economic powerhouse in its own right, but should also have as a primary role oiling the wheels of the real economy. There is a danger of a market failure that requires greater attention.

"However, a balance must be struck here. The financial services industry is critically important to the UK economy, not just in London, but in towns and cities across the country. Its impact on economic activity goes far beyond its own offices, trading floors and call centres. As we look to encourage greater long-term thinking by traders, institutional investors, and share-holders, we must avoid the mentality of the witch-hunt. At the same time, the City must stop inflicting egregious wounds on itself, with the recent Libor scandal a case in point."

Ends

Notes to editors:

The British Chambers of Commerce (BCC) sits at the heart of a powerful nationwide network of 51 Accredited Chambers of Commerce, serving over 104,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

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