Treasure Islands - Nicholas Shaxson [43]
The next part of the City of London’s offshore armory is the strangest one. It concerns an organization called the City of London Corporation. On the face of it, the Corporation of London, as it is sometimes known, is merely the municipal authority for City of London, a 1.22 square mile of prime financial real estate located at the geographical center of the physical, sprawling metropolis of greater London. But the Corporation of London is far more than a municipal authority. It is a lobbying organization for the financial sector that is so deeply embedded in the fabric of the British nation-state that it has become impossible in Britain, even after the greatest financial crisis since the Great Depression, to confront or even seriously check the power of finance. Without understanding the Corporation of London, one cannot properly understand how Wall Street has become so powerful in the United States.
At its broadest, the term City of London refers to the financial services industry based in Britain, mostly located inside the so-called Square Mile that is the City. Smaller clusters of financial services activity exist elsewhere: The hedge funds in Mayfair a few underground stops farther southwest and the newer Canary Wharf, three miles east along the Thames river, are also important, hosting the spillover from the overloaded City. Neither these upstarts nor other small financial poles in places like Edinburgh or Leeds are really rivals to the Square Mile. The Corporation of London spreads a protective mantle over them all.
London hosts more foreign banks than any other financial center. In 2008 the city accounted for half of all international trade in equities, nearly 45 percent of over-the-counter derivatives turnover, 70 percent of Eurobond turnover, 35 percent of global currency trading, and 55 percent of all international public offerings.24 New York is bigger in areas like securitization, insurance, mergers and acquisitions, and asset management, but much of its business is domestic, making London easily the world’s biggest international—and offshore—financial hub.
The head of the Corporation of London is the Lord Mayor of London—not to be confused with the mayor of London, who runs the much larger greater London municipality that contains the City, geographically speaking, but has no jurisdiction over its nonmunicipal affairs. And this separation of powers matters.
When the Queen visits the City, she stops at the boundary at Temple Bar and waits for the Lord Mayor of the City, accompanied by assorted City Aldermen and Sherriffs. This tourist ceremony, in which the Queen touches the Lord Mayor’s sword, strikingly highlights the political discontinuity between the City and the rest of Britain. When heads of state visit Britain the Lord Mayor throws more lavish banquets than the Queen. Each year the Chancellor, Britain’s finance minister, makes a speech at the Guildhall, the seat of City government, and at the Lord Mayor’s Mansion House, in which they justify how they have been serving the interests of finance.
The City’s nine thousand–odd human residents have one vote each in municipal elections here. But businesses in the City vote too, as if they were human, with thirty-two thousand corporate votes.25 In effect, Goldman Sachs, the Bank of China, Moscow Narodny Bank, and KPMG can vote in a hugely important British election.
The strangeness goes deeper and deeper. In fact the Corporation is so ancient and mystifying that barely any outsiders understand it.
The Corporation’s website is a warren of tunneling links and unexpected, bizarre connections. A series of rituals confirm the integrity of the whole. There are 108 livery companies, including the Worshipful Companies of Broderers, and of Cord-wainers. The current Lord Mayor, Nick Anstee, is an honorary Liveryman of the Plaisterers’ Company.26 There are the Sheriffs, Aldermen, the Court of Common Council, and the “Rules for the Conduct of Life.” There is the Lord Mayor’s show, resplendent with arcane ritual, gilded coaches, and elderly