Business | Economy
London views Dubai as smart rival
City fears it can no longer be complacent about its financial edge amid declining IPOs.
- By Alice Ross and Jeremy Grant, Financial Times
- Published: 00:08 July 22, 2008
London: London has appointed McKinsey, the management consultants, to study its financial services industry, amid fears that the British capital may be losing its competitive edge.
The appointment is a turnaround from a year ago when London watched as its main global rival, New York, was the focus of four reports warning that the US might be losing the battle to attract stock-market listings and financial services.
One of the US studies was undertaken by McKinsey and was commissioned by Michael Bloomberg, New York's mayor, and Senator Chuck Schumer. It gave warning that New York risked losing its status as a world financial centre within 10 years without big regulation and policy changes.
This sparked a review of US financial regulation and a blueprint for reform, which has largely sunk from view amid the credit crisis.
The appointment of McKinsey to study London's competitiveness is a sign that the city can no longer be complacent about its status amid declining numbers of initial public offerings globally while Middle East markets become more sophisticated. Dubai is being viewed by London as a concern - something it shares with New York.
In March, a new exchange in Dubai - the Dubai Gold and Commodities Exchange - launched trading in a version of the benchmark West Texas Intermediate crude oil futures contract that already trades in London and New York.
Dmitry Medvedev, the Russian president, has called for the development of Moscow as a global financial centre. Smaller financial centres such as Luxembourg are not aiming to compete with London directly, but it is feared that their concentration on specialist areas could chip away at some of London's expertise.
Boris Johnson, London's mayor, asked senior UK financiers and executives last month to work with the City of London Corporation to examine how London could "sustain its position as the world's leading financial centre".
Bob Wigley, chairman of Merrill Lynch for Europe, the Middle East and Africa, is leading the review, heading a committee including Lord Levene, chairman of Lloyd's of London, the re- insurance market, and John Varley, chief executive of Barclays bank.
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