Go friggin’ figure. At a black-tie event this summer, some of the world’s most powerful bankers and business executives gathered for a toast: “We are the international finance and business capital of the world, the world’s greatest global financial center, without question,” the mayor told the assembled crowd. But that was not Michael R. Bloomberg talking. The city was not New York — it was London.
Even as the Dow Jones industrial average reaches new highs and Wall Street companies report robust profits, by some measures New York’s long-held crown as the financial capital of the world may be slipping.
London, whose lord mayor, David Brewer, made the summertime boast at the city’s annual merchants and bankers dinner, has had a heady resurgence in banking and lending. In recent years, its stock market has attracted a growing number of companies that once would have sought to list in the United States. And London is drawing an increasing tide of hedge fund assets.
Other financial centers are growing, too: Chicago will be the home of the world’s largest derivatives market when the Chicago Mercantile Exchange and the Chicago Board of Trade merge, while Hong Kong is poised to be the biggest market for initial public offerings this year, with today’s pricing of the huge offering of the Industrial and Commercial Bank of China.
“There’s a genuine recognition that we need to make some changes,” said Laure Aubuchon, head of international business development for the New York City Economic Development Corporation. Winning financial business is “so important to New York City,” she said. The financial services industry makes up 9 percent of the city’s work force and provides 31 percent of the tax base, she said.
The rise of London has been particularly notable as a reflection of its geography. Some of the most rapidly developing markets and fastest-growing companies can be found in Asia and Russia, which are within time zones that can do business easily with London but not with New York. “In the 1980s and 1990s, large transactions did not get done without the United States capital markets,” said Michael Cole-Fontayn, a managing director with the Bank of New York in London. That is no longer true, he said.
“The European and Asian capital markets are becoming deeper and more liquid by the day,” he said. “You can get a $5 billion stock global depository receipt offering or a $10 billion privatization satisfied outside the United States S.E.C.-registered markets.”
London “is the world’s biggest financial center and very internationally flavored,” Vladimir Shmatovich, the chief financial officer, said in a telephone interview. And, he said, London is a closer flight to Moscow. Not to mention easier on the security business as well - which allows a lot more mobility. American paranoia has it's price - and it seems Wall Street is paying it.
http://www.nytimes.com/2006/10/27/business/worldbusiness/27london.html?_r=1&oref=slogin
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