London losing financial bragging rights?

Jill Barshay Feb 29, 2008

London losing financial bragging rights?

Jill Barshay Feb 29, 2008


Kai Ryssdal: Good students of American history that we all know we laid our differences with Great Britain to rest 200 years ago… Right?

Well, yes and no. Rivalries have persisted — none moreso than the one between our respective financial centers. There’s always been a debate whether New York or London’s more important to the global economy.

A new survey says London’s lost some ground lately and that the Big Apple’s climbing back on top. And just like in the history books, taxes are at least partly to blame.

Our New York bureau chief Jill Barshay reports.

Jill Barshay: Call it case of insecurity, but London wants to know where it where it ranks in the global economy. The City of London Corporation is constantly polling 1,200 financial executives around the world. Michael Mainelli conducts the survey.

Michael Mainelli: The trend over the last six months was definitely very bad for London. If we had only used responses from the last six months, London would have fallen below New York.

So is the sky falling in London? Hardly, but Mainelli says financial executives are going sour on the city because the government wants to impose a new tax on foreigners.

Mainelli: A number of people are questioning whether or not they would like to locate in London.

London doesn’t have much to worry about. New York may look more appealing right now, but both cities are still way ahead of third place Hong Kong.

Jonathan Bowles is the director of the Center for an Urban Future, an economic policy think tank. He calls the rivalry comical.

Jonathan Bowles: I do think it’s a bit far-fetched that both cities are now starting to panic, as if they are losing ground to the other city. It seems like a phony controversy, almost as if it was created by banks on both side of the pond that wanted to get more favorable tax and regulatory treatment.

Indeed, the City of London Corporation is actively lobbying to scratch that expat tax. And its U.S. counterpart group the Partnership for New York started conducting a similar survey last year too. It’s lobbying to loosen visa restrictions on foreign workers.

In New York, I’m Jill Barshay for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.  

Need some Econ 101?

Our new Marketplace Crash Course is here to help. Sign-up for free, learn at your own pace.