Is New York Still the Financial Capital of the World?
These days, many Americans — including Mike Bloomberg and Chuck Schumer — fear the answer to that question will soon be “no,” if it isn’t already; London is poised to take over.
An article [gated] in today’s Wall Street Journal about the credit crunch’s effect on the U.K. economy offers this sobering fact:
The financial sector accounts for more than one-fifth of all U.K. jobs, compared with only 6 percent of jobs in the U.S., and contributed about one-quarter of the nation’s economic growth over the past five years.
Granted, London means more to the U.K. than New York means to the U.S., but that 20 percent figure is still noteworthy.
On the other hand, if the financial markets are indeed heading for an extended downturn, the more diversified U.S. may suffer considerably less than the market-dependent U.K.
Does this mean the long dollar-to-pound slide is over?
By the way, in the very short period since Rupert Murdoch‘s News Corp. bought the Journal, it has already become a far more Times-ish general interest paper than a Financial Times markets paper, at least as evidenced by its front pages. As someone who cares less about the markets than most people who read the Journal, I am all in favor of this shift; what about you?