The City of London

The City of London is what Brendon O'Connell constantly references in conjunction with the European Banking Cartel. I came across this tweet today.

Here is Gemini's decidedly uncontroversial but nonetheless interesting account of The City of London's history and current status.

The City of London, often referred to as the "Square Mile," is a distinct city, ceremonial county, and local government district situated at the historic core of the wider Greater London metropolis. Operating essentially as a city within a city, it maintains its own ancient government, police force, and legal privileges that set it apart from the rest of the United Kingdom.

Origins and History

The City of London occupies the original footprint of Londinium, a settlement established by the Romans around AD 47. Due to its strategic position on the River Thames, it rapidly grew into a major port and commercial hub. Even after the withdrawal of the Roman Empire in the 5th century and periods of abandonment, the area was revitalized under Anglo-Saxon rule, particularly when Alfred the Great refounded the walled city in 886.

Following the Norman Conquest in 1066, William the Conqueror built the Tower of London to maintain control over the powerful city, but he also issued a royal charter in 1067 guaranteeing the citizens the rights and privileges they had enjoyed under Edward the Confessor. This established a precedent of autonomy that persisted through the centuries. While the monarch and national government established themselves to the west in the separate City of Westminster, the City of London dedicated itself to trade, guilds, and finance. It became the principal source of loans for monarchs, which further cemented its political independence and allowed it to negotiate ongoing self-governance.

Unique Governance

The City is administered by the City of London Corporation, the oldest continuous municipal democracy in the world, with roots predating the national Parliament. Its governance structure is fundamentally different from the 32 London boroughs that surround it:

• The Lord Mayor: The Corporation is headed by the Lord Mayor of London (a distinct and much older role than the modern Mayor of London). The Lord Mayor serves a one-year term, acts as a global ambassador for the UK's financial services sector, and resides at the Mansion House.
• Ancient Councils: Decision-making operates through the Court of Aldermen and the Court of Common Council, systems that evolved from medieval administrative courts in the 12th and 13th centuries.
• The Business Vote: Uniquely, both residents and businesses have voting rights in local elections. Because the City is primarily commercial, the business vote heavily outnumbers the residential vote, ensuring that the local government is closely aligned with the needs of the financial sector.
• Independent Services: The City maintains its own independent police force, the City of London Police, which specializes in economic crime and fraud, separate from the Metropolitan Police that serves the rest of Greater London.

Current Economic Status

Today, the City of London is one of the world's preeminent financial and business centers. While it has a small residential population of roughly 8,600 people, it accommodates a daily influx of over 670,000 commuting workers.

• Financial Hub: The Square Mile generates approximately £109 billion in economic output annually and accounts for one in every five financial services jobs in Great Britain. It is home to the Bank of England, the London Stock Exchange, and over 250 foreign banks.
• Global Position: Despite geopolitical shifts and debates over listing destinations, the City remains Europe's leading financial market and ranks securely behind only New York on the Global Financial Centres Index.
• Modern Expansion: The Corporation has increasingly focused on expanding into innovative sectors such as fintech, green finance, and cyber security to maintain its global competitiveness and adapt to the structural shift toward professional and technical services.

I asked Gemini about the connections between the City of London and the Bank for International Settlements (BIS) and its report makes clear the extraordinary legal and financial independence each institution has.

BIS headquarters in Basel, Switzerland

The connections between the City of London and the Bank for International Settlements (BIS) in Basel are foundational, operating at the highest levels of global monetary policy, banking regulation, and financial infrastructure.

While the City of London is a sovereign financial district and the BIS is an international organization, they are inextricably linked through the Bank of England (which resides in the City), shared regulatory frameworks, and a mutual focus on global financial stability.

The Bank of England: The Primary Bridge

The most direct physical and institutional connection between the two entities is the Bank of England (BoE). Headquartered on Threadneedle Street within the Square Mile, the BoE acts as the City's representative in the global central banking community.

• Foundational Role: The BIS was established in 1930, initially to handle German reparations after World War I. Montagu Norman, the highly influential Governor of the Bank of England at the time, was a primary architect of the BIS. He envisioned it as a way to institutionalize cooperation among central bank governors outside the interference of politicians.
• Ongoing Leadership: The BoE is a major shareholder and a permanent member of the BIS Board of Directors. Senior figures from the Bank of England regularly travel to Basel for the bi-monthly meetings of central bank governors, often referred to as the most exclusive club in global finance.

The Basel Accords and City Regulation

The most profound impact the BIS has on the day-to-day operations of the City of London is regulatory. The BIS hosts the Basel Committee on Banking Supervision (BCBS), the primary global standard-setter for the prudential regulation of banks.

• Capital Requirements: The agreements forged in Basel—known as Basel I, II, III, and the incoming Basel IV—dictate how much capital banks must hold in reserve to prevent financial collapse.
• Impact on the Square Mile: Because the City of London is home to over 250 foreign banks and handles a massive percentage of global foreign exchange and derivatives trading, the rules drafted in Basel directly shape the profitability, risk models, and daily operations of nearly every financial institution operating within the City. The BoE’s Prudential Regulation Authority (PRA), located in the City, is responsible for enforcing these Basel standards within the UK.

The BIS Innovation Hub in London

In recent years, the connection has expanded from traditional monetary policy into financial technology. Recognizing the City of London's status as a premier global center for fintech, the BIS established a node of its BIS Innovation Hub in London in 2021.

Operated in partnership with the Bank of England, this hub focuses on developing public goods in the technology space to support central banks globally. Its projects in London concentrate on:

• Central Bank Digital Currencies (CBDCs): Exploring the architecture and implications of digital fiat money.
• Next-Generation Financial Market Infrastructures: Developing systems to settle tokenized assets and modernize global payment networks.
• RegTech and SupTech: Creating technological tools to help regulators better monitor the massive data flows generated by financial hubs like the City of London.

Parallel Legal Anomalies

Both the City of London and the BIS share a unique structural characteristic: they both operate with extraordinary legal autonomy that shields them from standard domestic oversight.

• The City of London operates under ancient charters, maintaining its own separate government (the City of London Corporation), its own police force specializing in economic crime, and an electoral system where corporations outvote human residents.
• The BIS operates under an international treaty (the Hague Agreement of 1930) that grants its headquarters in Basel sovereign immunity. Its premises are legally inviolable; Swiss authorities cannot enter without permission, its assets are immune from seizure, and its communications are protected.

In essence, the City of London acts as the operational engine of global capital markets, while the BIS in Basel serves as the chief architect of the rules that govern that engine.

The following interesting map accompanies the Wikipedia article about the BIS. 

Source: Wikipedia