Wall Street and London are financial market rivals in a global economy that’s being rattled by populism and protectionism. U.K. economic secretary Bim Afolami used his first official visit to Washington this week to try to promote trans-Atlantic ties as the U.S. and Britain brace for elections that could shake up the relationship. Afolami took on his role as the Sunak cabinet’s financial markets point person in November. He sat down with MM at the British ambassador’s residence in between meetings with CFTC Chair Rostin Behnam, Treasury Undersecretary Nellie Liang and the Securities Industry and Financial Markets Association. Part of Afolami’s mission was to address any lingering doubts about the U.K. post-Brexit. “Some of the work that I want to do here … is to make sure that people realize that all these terrible predictions in 2016, almost none of them came true,” he said. “The City of London is still very competitive and open to business.” One of the big topics he discussed in Washington: What the U.K. government is doing to improve London’s competitiveness, and the potential impact on the U.S. “There is always friendly competition because that’s natural in politics and life,” he said. “But fundamentally, it is not a zero sum. London’s success will often benefit American businesses that are in New York as well. … It’s important that we see London’s success and improved competitiveness, which we’re driving very hard toward, as complementary, not contrary, to New York and the U.S.” The other big topic was crypto. Afolami is eager to find ways to make the U.K. more of a destination for the digital currency industry. He expects Britain’s stablecoin regulations will be in place by the middle of this year. (U.S. lawmakers are still hashing out how to proceed on that issue.) “A few years ago, a lot of people were saying, don’t regulate this, you’ll legitimize this weird thing that’s strange,” he said. “That’s a wrong approach. You should regulate it. The responsible actors want to regulate it. If you shine a light on it, if you’re worried about bad actors, the rats will run away.” The U.K. is gearing up for a face-off between Afolami’s Conservative Party and Britain’s Labour Party, which has recently ramped up its pro-business pitch. Shadow Chancellor Rachel Reeves was part of Labour’s contingent in Davos this year. Reeves said last month that she would not reinstate a cap on bankers’ bonuses, arguing that Labour would champion the U.K. financial sector. In response, Afolami said, “The industry knows that we're the guys on our side of the house who really get it and over the long term can be trusted with it.” “I worked in the City of London. The chancellor ran a successful business. The prime minister was very successful in finance,” he said. “We have worked in these industries. We understand them. We understand the people. We are committed to making them successful.” On the U.S. election, Afolami tried to project a hopeful outlook when asked about any potential concerns with a further escalation in populism and protectionism. Chancellor Jeremy Hunt said last month that a return to U.S. protectionism would be a “profound mistake” when your MM host asked him about the possible election of former President Donald Trump and his plan for tariffs. Afolami said “election season in the U.S. can be very rough rhetorically but that doesn’t always bear out in policy.” He said he has faith there are people in both parties “who maintain broadly the right ideas, most of the time.” “I see with the European Union certain tendencies towards a protectionist direction,” he said. “I'm afraid it's not going to work there, either. The US and U.K. retain just that very deep understanding. It's in our bones the importance of that openness and [those] liberal with a small ‘l’ economic opportunities, and what that does to the prosperity of our two countries. And we've got to maintain that. Because political fashions come and go but essential economic truths remain. And I'm confident that whoever wins in November will recognize that.” Want more? Afolami also spoke with our POLITICO Tech podcast. It’s Thursday — Send tips to zwarmbrodt@politico.com.
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