The U.S. is setting an example for the world in terms of tax friendliness, Barclays CEO Jes Staley told CNBC while at the World Economic Forum in Davos.
“The USA has clearly embarked on a strategy to be very business friendly as a regulatory matter and now as a tax matter,” Staley said Thursday. “And the question is, how is the rest of the world going to respond?”
“45 percent of our business is in the U.S., now 45 percent of our business is in the lowest tax jurisdiction in the world … for Barclays, it’s a very big deal.”
“What does this mean for Europe? What does it mean for the U.K.?,” he posited. “The tax policy will change the dialogue about how countries are coordinating globally both in terms of how to deal with business as a function of regulation and tax.”
Staley noted the U.S. tax reform package, which was passed in late December and cuts corporate taxes from 35 percent to 21 percent, represented a “dramatic break” from the regulatory regime imposed following the 2008 financial crisis. Asked if he believed the U.K. government was failing the financial sector, the banker was positive.
“The level of engagement we’ve had since The Brexit vote has been very high … I believe Barclays and our view has been heard by the British government,” he said.
“A long way to go, but I don’t think the British government has been blind to the importance of London and the importance of a bank like Barclays.”
Looking forward for the U.K., Staley emphasized the importance of regulatory uniformity after Brexit.
“I think the U.K. should negotiate a regulatory regime which is roughly equivalent to Europe to keep us having access to that single market,” Staley said. “Now that the United States has basically said we’re going to take a different regulatory tact, maintaining the regulatory flexibility in the U.K. to keep London competitive with New York is another dimension to this debate.”
The American banker took over as Barclays chief executive in 2015 on a pledge to rebuild the bank’s scandal-ridden reputation, becoming its fifth CEO in seven years. Prior to that he spent 34 years at J.P. Morgan, eventually becoming CEO.