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January 23, 2007
its competetive on Wall Street too
It is not secret that there are other global cities trying to take business from NYC. Dubai has been getting a lot of attention lately. It looks like there is a real risk that they could dethrone Wall Street as the top financial hub. Most of the reasons listed seem to focus on the increasing risk aversion in the US.
While controls are good to a degree, one has to remember that a lot of investors seek markets precisely because they are risky. When investors attempt to avoid risks, they are often trying to avoid the risk of class action lawsuits and compliance related fiascoes. Something to keep in mind as we try to balance market reward and risk aversion.
From USA Today
NEW YORK — This city's famed Wall Street, long considered the financial capital of the world, is in danger of losing its top spot within 10 years unless the U.S. reforms its burdensome regulatory rules, limits frivolous lawsuits and makes it easier for skilled talent from abroad to come here to work, says a new study commissioned by top New York elected officials.
In what amounts to a wake-up call to U.S. lawmakers and regulators, the study released Monday by Mayor Michael Bloomberg and Sen. Charles Schumer, D-N.Y., says competition from cities that have more market-friendly rules and regulations, such as London, Dubai, Hong Kong and Tokyo, threatens U.S. dominance of the financial services industry.
Posted by beaumontv at January 23, 2007 12:23 PM
All things run in cycles and as history has proven some markets/societies just have their day. But DBX is only one concern particularly as crude is being cleared and settled in Euro more often than not but perhaps an even larger threat would be Hong Kong followed closely by its sister the Shanghai exchange. Certainly Hong Kong did the worlds largest IPO recently and its numbers dwarf whats going on in Wall St. Then if we look at risk/compliance and the HKMA, they are probably one of the leading authorities in the world and the regulations haven't seemed to effect the volume on the exchange in the same way SOX has done in the US. The US is still struggling with its capital accord while markets such as Hong Kong have it done. Really, Wall Street might have already been dethroned like it or not, lets be real here. The leader however might be just a little bit further east than everyone perceives.
Posted by: Martin Davies at May 11, 2007 11:02 AM
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