Remember when London was the new New York? It was only a year ago that London was proclaimed the global capital of finance. But that story is so last year. New York City is back.
London’s reputation as the place where movers and shakers move and shake is suffering under the weight of recent financial scandals and political backlash against well-heeled financiers, the Financial Times reports today. A global survey of finance professionals undertaken by the City of London Corporation reveals the shift.
What’s dragging down London? The FT cites the collapse of Northern Rock as damaging the reputation of the City’s elite, but inventing SIVs and being responsible for some of the more exotic credit market related financial structures probably has not helped much either. Another downer: those Brit politicos keep threatening to raise taxes on private equity partners, hedge fund managers and non-domiciled residents. Meanwhile, the tax enforcers have been on something of an enforcement spree.
London’s edge over New York eroded [Financial Times]
Hiring/Layoffs Watch '12: New York Good, London Bad
Relatedly, Goldman is looking for some young bodies. Financial firms in London, besieged by Europe’s sovereign-debt crisis, probably will shrink their workforce this year, snapping a hiring rebound from 2008’s credit crisis as New York’s industry ekes out job growth. Banks, insurers and other financial-services firms may eliminate about 3,000 jobs across greater London as companies in the New York region add 9,000, according to U.K.-based researcher Oxford Economics Ltd. London’s proximity to the debt crisis is undermining the city’s efforts to gain on its trans-Atlantic rival. While Wall Street also is suffering from a global slowdown in trading and deal-making, North American banks are benefiting from a surge in consumer lending...Some large banks are offsetting senior-staff reductions by recruiting less-expensive workers. New York-based Goldman Sachs, seeking to cut $500 million of costs, expects its workforce to feature a greater proportion of junior employees by year-end, Chief Financial Officer David A. Viniar, 57, said July 17. “Wall Street is tilting toward younger, up-and-coming talent,” Kahn said. London Firings Seen Surging As Finance Firms Add Jobs In NY [Bloomberg]
New York, London, Hong Kong… Moscow?
Russia may have the kind of official corruption that would make a Sicilian blush, a fairly weak grasp on the rule of law, a pair of would-be czars trading its top two political posts and, now, more orphans than it can give away. It also may have a stock exchange worth as much as the big one with the columns down on Broad Street.