Lawrence Scott

New York or London?

There's much concern in the media about the "relocation" of the capital markets from New York to London. Statistics cited include the near parity in new IPO activity as well as the general cost of being a public company in the US and the stranglehold that regulatory compliance has on new companies coming out of the gate. To all of this I respond: Hogwash. I walk the streets of Manhattan nearly every week and talk to market participants almost daily. A recent roundtable on the implications of best execution trading rules from Reg NMS implementation indicate to me that certainly the equities markets are alive and well and thriving, and in fact are undergoing their usual destruction/reinvention cycle as New York evolves itself yet again. The dynamism of the equity markets is certainly a function of its New York roots. So new companies may list in London or even in Hong Kong. But the liquidity (and hence the nexus) is in New York Having said that, London is clearly and undeniably the leader in the FX business and has demonstrated continued innovation in the credit derivatives space. But think about the seminal leaders in this realm, and its our own JPMorgan Chase. And that was several years ago now. So I say that the capital markets at least are big enough for two centers of excellence. The equity and debt markets are driven by New York. The FX and derivatives markets are driven by London. The large global financial groups that dominate these businesses operate in a largely borderless fashion. So today's lunch meeting in New York is followed by next week's dinner meeting in London. Why do I ask the "New York or London" question? Many have wondered what happens to decision making when revenues shift or expand in one geography or another. We are a mobile society and we now tend to live where we want to as a function of quality of life. So the question is not "New York or London". The challenge how best to leverage the expertise in one location for the benefit of the other.

Posted at 12:59PM Feb 14, 2007 by lscott97 in Sun  |  Comments[0]