said the other day, we should ask, when faced by change and innovation, not why, as so many of our colleagues in other countries do, but why not.
This is also the fifth anniversary of the Financial Services Act.
We all went through a change of regulatory mode in this country, and we encountered some early problems. But in our traditional way, we have been able to adapt the new regulatory
For system to overcome at least the principal difficulties. this the. Securities and Investment Board and its Chairman must take great credit.
Above all perhaps, we have been quick to recognise the dramatic changes which have taken place in financial markets in the last quarter century. We have done much to adapt our regulatory system to deal with them.
I refer, of course, to the dramatic and seemingly inexorable growth of the position of institutional and professional investors in the equity markets, relative to private
individuals; and to the freeing of capital flows and the rapid expansion of cross border investment with its profound effect on domestic market places.
Finally, there is the influence of information technology. This has, at a stroke, destroyed the monopoly formerly enjoyed by floor based market places. It has destroyed geographical constraints on trading. And it has opened up new opportunities for market places to improve the services they provide to their
users.
In London, these challenges have been met, at least in part. Regulation now recognises the difference in requirements and in the need for protection, between the individual and the professional investor.
We have promoted too, the growth of a dynamic International Equities Market, which now accounts for nearly two-thirds of recorded cross border trading throughout the world, and a far greater proportion of cross border trading in Europe. That market is directed to the service of institutional and professional investors throughout this time zone, and indeed, for those who wish to use it, for investors in other time zones. Yet it is a regulated market, my Lord Mayor, with its regulation directed to the needs of institutional investors. Those institutional investors quite clearly recognise it as a market which they can use, and use with confidence. The results speak
for themselves.
Elsewhere regulators and the markets they regulate have yet to acknowledge these powerful influences.
In the EC we still face a determined effort by many countries to drive business into nationally based markets, just when economic and technological forces are breaking down geographical barriers and making such restrictions unenforceable. We find our United States colleagues complaining of institutional business in US
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