THE FORMER boss of the London Stock Exchange Group has warned that the capital's beleaguered bourse is unlikely to see a revival unless the next government pushes through a major overhaul of City rules.

Xavier Rolet, who headed up LSEG between 2009 and 2018, said London's stock market needed sweeping changes including the removal of "punitive regulations" like so-called Solvency II rules, which set capital requirements for insurers.

He added that "hopes of a stock market liquidity revival are likely to be disappointed" if policymakers fail to give additional support.

"US equity markets are more or less ten times more liquid than UK and Europe combined," Rolet told The Telegraph.

"It's not an issue of confidence, or tweaking this or that rule, or having a sovereign fund conveniently on hand to inject one-off liquidity as desired or twisting the arm of index companies to increase the weight of domestic issuers."

Both main parties have vowed to unlock more capital into the UK's public markets. Shadow chancellor Rachel Reeves has said Labour would create a British sovereign wealth fund if it wins the election on 4 July, with the party broadly backing the government's City reform agenda.

The former London Stock Exchange chief's comments come as the capital's stock market struggles with a wave of foreign buyers pouncing on London-listed companies due to their relatively low valuations when compared with their overseas counterparts.

(c) 2024 City A.M., source Newspaper