Location advantage works for London investment bankers

Location advantage works for London investment bankers
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First Published: Wed, Mar 28 2007. 01 11 AM IST
News that their UK counterparts lugged home a lot more loot last year could put US financiers in a funk. In some products, London investment bankers earned 50% more than their New York rivals, according to head hunter Napier Scott. But before they pull out their Sarbanes-Oxley cudgels and begin agitating for the repeal of the Securities Exchange Act of 1934, US bankers may want to consider one wellspring of London’s success. It’s not necessarily that the City has more brains and fewer rules than the Street. Its advantage has a lot to do with simple geography.
Bankers in London can do business with Asia in the morning and North America in the afternoon. They also have a leading role in European M&As (mergers & acquisitions). And a good bit of West Asian petrodollar revenue flows through London’s asset management shops. All in all, it’s a great environment for investment bankers and traders to reap big profits. Granted, the UK also has some regulatory advantages. London’s single regulator, with its principle-based approach, makes life simpler than grappling with the pack of American bank and securities watchdogs—not to mention its 50 insurance regulators. And Sarbanes-Oxley has probably given UK markets some advantage in attracting new listings.
But in a number of respects, London has become a victim of its own success. Traffic in the City moves at a crawl. The cost of living is sky-rocketing. Prices of flats in Belgravia shot up in by 29% last year, while luxury condos in Manhattan only increased by 6.3%. Before American bankers grab their resumes and book the next flight to Heathrow, they may want to see whether richer pickings in the UK will offset that expense. And then there’s the weather...
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First Published: Wed, Mar 28 2007. 01 11 AM IST
More Topics: Money Matters | Global Markets |