EMERGING GLOBAL FINANCIAL HUB – LONDON
The worldâ€™s most powerful bankers and top business executives gathered at a black tie event this summer in London. The mayor of the city raising a toast to the audience said that the most powerful bakers and top business assembled here because the city of London is emerging as the financial hub of the globe. He further added that London is the worldâ€™s greatest financial center. Surprisingly the talk was from mayor of London this year and not from New Yorkâ€™s mayor Michael R Bloomberg.
Even as the Dow Jones industrial average reaches new high and wall street companies report robust profits by some measures New Yorkâ€™ long held crown as the financial capital of the world is slipping.
London whose Lord Mayor made the summertime toast at the cityâ€™s annual merchants and bankerâ€™s dinner has had a heady resurgence in banking and lending. In recent years its stock markets has attracted a growing number of companies that once would have sought to list in the U.S. And London is drawing increasing number of hedge fund assets.
Other financial centers are growing too. Chicago will be the home of the worldâ€™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 IPOs this year with the huge offerings of the Industrial and Commercial Bank of China.
The possibility that the New York is losing ground has raised alarms in Washington and Bloombergâ€™s office.
Head of International business development for the New York City Economic Development Corporation said that there is genuine recognition to make changes to win financial business to New York City which is so important. The financial services industry makes up 9% of the cityâ€™s work force and provides 31% of the tax base.
The rise of London has been particularly notable as a reflection of its geography. Some of the most rapidly developing markets and fast 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.
Two decades ago large transactions id not get done without the U.S capital markets remarked the MD of Bank of New York based in London. Now it is no longer true and required as the capital markets in Asia and Europe are becoming deeper and more liquid day by day. One get a $5 billion stock GDR offering or a $10 billion privatization satisfied outside the SEC registered markets.
TMK, a Russian pipe manufacturer hopes to raise $ 1 billion in public offering in the very near future. It was approached by he NYSE but chose to list on the LSE. London is the worldâ€™s biggest financial center and very internationally flavored. The CFO of the TSK said that London is a closer flight to Moscow.
Another factor that London has emerged as a Global hub is Europe is no longer dependent on heir exports to America. Earlier were the days when American consumers tightened their purse strings European and Asian economies were affected in a negative way.. Now Europe can look forward to Asian countries whose consumers are on a spending spree and are able to sustain on their own domestic demand. All these factors make London as the global financial hub taking over from New York.