Posts this month
A blog on financial markets and their regulation
Peter Weinberg, a former CEO of Goldman Sachs International has a
piece in the Financial Times (“How London can close gap on Wall
Street”, Financial Times, March 30, 2006) arguing
why London could catch up with New York as the world’s leading
financial centre. He believes that two factors give London a chance
Weinberg also suggests that an acquisition of the London Stock
Exchange by a US exchange could facilitate this process.
We know that the United Kingdom has historically paid a big price
for the success of London in the form of subordinating its domestic
economic policies to the needs of the City. The United States has clearly shown
that it is unwilling to do so. This would mean that even if London
does gain, this will be a pyrrhic victory that does little good to the
United Kingdom. See my post last year on whether
financial centres are worthwhile.
Weinberg does however make an important point that New York’s
dominance of global finance cannot be taken for granted. Those of us
who had loosely interpreted Kindleberger as implying that a global
centre is more or less secure in the absence of war or other serious
upheaval should probably think again.