London’s dominance of capital markets is vulnerable, warns Otty

E&Y tower

The new Ernst & Young chairman Mark Otty has issued a dire warning that
the UK’s capital market strength could disappear with the same rapidity it has
arrived, and warned the professional services sector to beware of losing
business as foreign owners buy up UK plc.

In his first major interview since taking on the role last Summer, Otty told
Accountancy Age: ‘We can certainly see that there has been a shift in
capital markets activity in the last few years from the US to the UK – but the
dark lining is that it’s reasonable to assume that it could shift out just as
quickly from the UK.’

He added: ‘I wouldn’t say [the UK] is not a long-term prospect. But there is
a need to recognise the UK is changing.’

Otty stressed the importance of E&Y’s new international structure, which
sees the network split into seven regions, allying major western firms with
different emerging markets. The structure would help the firms to weather the
flurry of foreign ownership changes, he implied.

‘We have seen ownership shift. What impact is that going to have on the
services sector? ‘There’s more work done where the holding company is and less
where the holding company used to be. These are the questions I am asking.’

In the interview, Otty hinted at a new ethical tone to E&Y, discussed the
new structure, the burden of regulation, and the current performance of the Big
Four firm.

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