Ex-Goldman president Harvey Schwartz to chair new UK clearing bank
By Josh White
Date: Tuesday 30 Nov 2021
(Sharecast News) - A sixth clearing bank for the UK was launched on Tuesday, with the Bank of London claiming to be the first pre-revenue bank in history to attain a valuation of $1.1bn.
In its announcement, the bank confirmed it had received its licence to operate as a clearing bank, making it only the second new clearing bank in London in more than 250 years, after the founding of Nick Ogden's ClearBank in 2016.
New financing for the Bank of London was being led by ForgeLight, with follow-on investment from 14W Venture Partners and Mangrove Capital Partners, and further additional investment committed over 18 months.
The Bank of London said it had raised $120m to-date, with $90m in the current round, ranking it in the UK's top 10 most valuable fintechs immediately.
It said it was in advanced talks with regulators in the European Union and North America as part of its immediate international growth strategy, adding that it was "on track" to hire more than 3,000 staff across the UK, the EU and North America over the next five years.
The majority of those hires would initially be made in the UK.
"We've spent over four years working quietly in the background, bringing together veteran banking experts, leading creative innovators and visionary technologists to build, patent and validate truly game-changing technologies and innovations to transform the very fundamentals of banking," said founder and chief executive officer Anthony Watson.
"We leverage our leading-edge proprietary technology innovations and differentiated bank capabilities to remove unnecessary risk, unlock liquidity and deliver revolutionary products and services at significantly lower costs to enable near instant settlement without a financial intermediary in the flow of funds."
The Bank of London said it was entering the market with three key focus areas, being clearing and settlement, transaction banking and agency banking.
"The Bank of London is going to address an arcane part of the global financial system - the sleepy worlds of clearing and global transaction banking," said group chairperson Harvey Schwartz.
"I was honoured to spend 21 years of my career at one of the leading financial institutions, retiring from Goldman Sachs in 2018 as president and co-chief operating officer.
"During the great financial crisis, I saw first-hand how the legacy payments, clearing and settlement processes that are at the heart of the global financial system contributed to bringing the world's economies to their knees, through their inefficiencies and inherent liquidity risk."
Schwartz quipped that banking at its fundamentals was an "immensely complex" data problem.
"The Bank of London is the solution - and our unique solution is simplicity."
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