Our Irish grandmother used to say that London would be a nice place if not for all those English people. Well, it turns out that this is precisely what makes London such a fabulous place for finance: lots of non-English, according to New York magazine.
London has always depended on trade and immigration. Even in the nineteenth century, the City was dominated by foreigners, such as George Peabody, an American who was the London partner of J.P. Morgan’s father, and Mayer Amschel Rothschild, a German financier. But after war engulfed Europe in 1914 and the City turned inward, it lost its place in global finance to New York.
Seventy years later, U.S. banks sensed an opportunity in London again when Margaret Thatcher deregulated the City. “I remember talking to the head of Goldman Sachs in 1982,” says Richard Lambert, director-general of the Confederation of British Industry. “He said, ‘One day, we are going to be as big in the rest of the world as we are in New York.’ I thought to myself, You silly prat, what about Hill Samuel?” (Hill Samuel was then one of the biggest investment banks in the City.)
The British hold on the City soon cracked. By the late nineties, after Citigroup bought Schroders and the Swiss Bank Corporation (which later merged with UBS) bought S. G. Warburg, there was a flurry of anxiety that the City was no longer British owned. It became known as “Wimbledonisation,” after the tennis tournament in southwest London, which was last won by a British man—Fred Perry—in 1936. The British can host a fine tournament, the joke went, but they cannot win themselves.
Are We No Longer the World’s Financial Capital? [New York Magazine]