London’s Status as the Financial Capital in Peril
Several reports claim that UK insolvency rules must change if London is expected to keep its status as the UK’s leading financial centre, according to The European High Yield Association (EHYA)
The EHYA warns that the legislation is out dated and unable to handle complex restructuring projects that will hit the market when the economy faces its next downturn.
The restructuring professionals sent a letter to the Treasury claiming that the legislation must ease the power it gives customers and suppliers when debt ridden, or restructuring companies, enter the administration phase. It should also take away the veto rights held by some who do not see a financial gain in it for themselves.
‘The wider dispersion of debt may make traditional workouts unachievable,’ warned the association.
The ramifications of this will be felt all through the UK economy, but it will hit London like a tidal wave. Millions of consumers who took out massive mortgages and personal loans to move to, and live in, London will find themselves forced to move, or facing unemployment if financial companies go bankrupt, or are forced to move.
The negative equity felt by the London market alone will be enough to drive the economy into a recession, maybe even a depression, as millions of homeowners loose their homes and are forced into bankruptcy.
There is no word whether the government plans to change the insolvency rules, or whether they feel that the number of global corporations that located in London will buoy the economy.
Source: 1stopfinanceshopuk.biz
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