New York tops the rankings as one of the world's big financial centres, but now London, with free-wheeling and open markets, could upstage the United States, where stiff regulation has given foreign investors cold feet.
The US domestic capital markets still dwarf those in Europe and the New York Stock Exchange and Nasdaq offer trading in shares in some of the world's biggest companies.
Wall Street boasts the world's biggest banks - Citigroup, Bank of America and J.P. Morgan Chase, as well as the world's leading corporate finance firms such as Goldman Sachs and Morgan Stanley. But Wall Street can now be a more costly and complex place to do business for foreigners because of a regulatory crackdown after the excesses of the Internet stock boom and the collapse of Enron.
Tougher immigration controls after the September 11 World Trade Center attacks have also made it more difficult to move clients/staff into the United States.
So Wall Street is coming to London, as illustrated by the New York Stock Exchange and Nasdaq's overtures to the London Stock Exchange.
"I think both the NYSE and Nasdaq are probably trying to find a way of getting themselves outside the brick wall that is being built around America," said one senior executive at a London-based investment bank.
The long-running battle over who owns the London Stock Exchange illustrates London's key position. The New York Stock Exchange and Nasdaq are the latest contenders in the contest for the LSE. They want to grab some of the spoils from London's pre-eminence as an international capital centre.
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