The Chancellor, Alistair Darling, is to set up five working groups with leading City figures to help maintain London's place as a pre-eminent financial centre.
The move comes after fears the credit crunch may cause London to lose the status it has built up over the last decade, and many jobs are likely to be lost in the City.
The working groups will look at a number of different issues that affect the financial services, including regulation and raising capital.
One group, to be chaired by Darling and Sir Win Bischoff, head of Citigroup, will examine competitiveness in financial services. It will consist of key staff from the London Stock Exchange, Lloyd’s of London and the CBI.
A second group, to be chaired by FSA chief executive Hector Sants and finance minister Kitty Ussher, will look at the efficiency of current capital raising procedures.
The other working groups will look at the issues for lawyers, accounts and other support services, one will examine the insurance industry and the final group will look at wholesale funding markets.
Darling says the financial services is a major UK employer and it is vital it can respond to the rapid changes in financial markets.
The Chancellor is concerned that a prolonged economic downturn could cause major financial institutions to move to up-and-coming centres in the Middle-East, or in Mumbai and Shanghai.
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