March 25, 2023

Bloomberg Builds an Empire in London

Bloomberg Place, roughly the size of a Manhattan city block, is the future European home of Michael R. Bloomberg’s company and charity. But it is only one piece of the New York City mayor’s growing British empire.

He is underwriting a major expansion of one of England’s most prestigious galleries, in Kensington Gardens, designed by the noted architect Zaha Hadid.

He has the ear of London’s raffish mayor, Boris Johnson, who dispatches aides to City Hall in New York for tutelage in municipal management.

Mayor Bloomberg and his aides court the city’s elite, holding expensive dinners for tastemakers and Downing Street officials. The buzz is so great that a chief aide to Prime Minister David Cameron impishly floated the idea of a Bloomberg candidacy, for mayor of London.

As he imagines a more global life for himself after City Hall, unshackled from the 24/7 needs of running New York, Mr. Bloomberg — an Anglophile with a taste for English Regency style — is exporting his vast quantities of financial, social and political capital to this ancient city, where he has long yearned for influence.

Manhattan is home, and Bermuda a weekend escape, but no place has captured the mayor’s imagination like London, a kind of Bloomberg utopia where guns are banned, drivers pay a fee at peak hours and bicycling is a popular mode of commuting.

The affection, it turns out, is mutual: Mr. Bloomberg wrote a blurb for a book Mr. Johnson wrote. “Mike’s had a lot of cut-through in Britain,” Mayor Johnson said in an interview on a London commuter train last month. “We endlessly try to find ways of entertaining him, but generally speaking, it’s the other way around.”

Advisers to Mr. Cameron tried their own version of 311; Mr. Johnson started a volunteer program modeled after Mr. Bloomberg’s. Both have dined with the mayor on the Upper East Side.

“When I’m in New York, I’m treated like a king by Bloomberg, and it’s fantastic,” Mr. Johnson said.

Still, any foreign affair has its hiccups. Mr. Bloomberg’s attempts to install noisy air conditioners at his $20 million London home have earned the ire of neighbors, prompting local officials to call the plans “totally unacceptable.” And some of his more high-minded policies, like soda limits, have left the natives bemused.

When the mayors met for the first time, Mr. Johnson recalled, Mr. Bloomberg kept talking about trans fats.

“I didn’t know what trans fats were,” Mr. Johnson said, a glint in his eye. “I thought it had something to do with transsexuals, obese transsexuals, or something. Anyway, he made a great deal about that.”

A Gallery in the Park

Julia Peyton-Jones, the elegantly dressed director of the Serpentine Gallery in Kensington Gardens, was leading a tour last month of the newest exhibition hall when she picked up a monogrammed orange hard hat and placed it, gently, on her head.

“This is a present from Mike and Patti,” she said, smiling.

That would be Mr. Bloomberg, a lead benefactor of the expansion, and the deputy mayor who heads his charitable foundation, Patricia E. Harris. The mayor has already been offered naming rights to a room in the new gallery.

“There is no question,” Ms. Peyton-Jones said, “he’s among the most important supporters of contemporary culture in this country.”

Just as he assiduously conquered New York’s social scene, Mr. Bloomberg has, from his earliest days here, relied on parties and philanthropy to propel himself into London’s upper echelon.

He threw himself into the city’s cultural scene, joining the boards of the Serpentine and the Old Vic theater. A public relations firm was hired to make introductions in London society.

In a country where the government often financed the arts, Mr. Bloomberg adopted a more American style of corporate giving, stamping his name in museums where he paid for audio guides and sponsoring the Royal Court theater’s “Bloomberg Mondays,” when tickets were sold at a discount.

He bought a box at Ascot, the high-society horse racing grounds, and flew in celebrities by helicopter from London. (Guests received a photograph of themselves drinking Champagne with the top-hatted host.)

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DealBook: British Regulator Unveils Libor Overhaul

Martin Wheatley, Managing Director of the FSA, discusses changes to Libor.Carl Court/Agence France-Presse — Getty ImagesMartin Wheatley, managing director of Britain’s Financial Services Authority, said London’s reputation as a global center for financial services had been tarnished by the Libor scandal.

LONDON – A leading British regulator officially unveiled the government’s plan to overhaul the rate at the center of the manipulation scandal, but conceded that problems could still persist.

On Friday, Martin Wheatley, the managing director of the Britain’s Financial Services Authority, the British regulator, acknowledged that regulators should have stepped in sooner to fix the problems with the London interbank offered rate, or Libor. He also confirmed the broad strokes of the proposal, which came after a three-month review.
British authorities, which will provide more oversight, want to make it a criminal offense to alter the rate for financial gain. They also plan to implement new auditing systems to ensure traders cannot unfairly profit from small changes to Libor.

“There’s always a possibility for collusion,” Mr. Wheatley told an audience at Mansion House, the 260-year-old home to the lord mayor of London that is adorned with gilded statues and chandeliers. “But under the new regulatory structure, people would be taking a high risk.”

The proposed changes come amid an investigation into potential rate-rigging at big global banks like HSBC, UBS and JPMorgan Chase. In June, the British bank Barclays agreed to pay $450 million to settle allegations that some of its traders tried to manipulate Libor for financial gain. The firm was also accused of understating its rates submissions to make the bank appear healthier during the financial crisis.

Mr. Wheatley, who will lead the Financial Conduct Authority, a new British regulator that will become part of the Bank of England next year, said London’s reputation as a global center for financial services had been tarnished by the recent scandal.

In response, the country’s authorities have stripped the British Bankers’ Association, the London-based trade body that currently oversees Libor, from its powers to control the rate. A new administrator will be appointed over the next 12 months.

Organizations will be able to start pitching for the position next week. The data providers Bloomberg and Thomson Reuters, which collects the daily Libor submissions on behalf of the British Bankers’ Association, as well as NYSE Euronext have expressed interest in taking on the role. Users of Libor will still pay for the financial information, Mr. Wheatley said on Friday.

Regulators are aiming to improve the accuracy and reliability of Libor, which measures the rate at which banks lend to each other. To do so, they want banks to base the rate submission on actual market transactions whenever possible.

As part of that effort, authorities are planning to focus on fewer markets that are the most liquid. Five of the current 10 currencies, including the Swedish krona and Canadian dollar, will be removed over the next 12 months. The number of rates also will be reduced to 20, from 150.

British regulators will take a more hands-on approach with the rate. They plan to audit banks’ daily Libor submissions to avoid rate manipulation.

Even so, Libor will not be immune to manipulation. Because of limited interbank lending activity, Mr. Wheatley said, sometimes the rates would have to be based on a level of judgment from banks on what interest rates they would be able to secure from other firms.

“There’s still a risk,” he said.

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