Dollar's fall aids London's drive for financial supremacy

By David Smith
The Times, London
Sunday, December 3, 2006

http://business.timesonline.co.uk/article/0,,8209-2483663,00.html

The dollar's fall, which accelerated last week, will further boost the City of London in its battle with New York for supremacy in the financial markets.

London is already the biggest market for foreign exchange, foreign equities, international insurance, and international bank lending. This year it has handled a third more market listings than New York, $40 billion (£20 billion) versus $30 billion.

Analysts believe that worries about the dollar's stability will add to London's advantages, including its lighter regulation in comparison with America's Sarbanes-Oxley rules.

Sterling closed at a 14-year high of $1.98 on Friday after weak American growth figures. It is expected to hit $2 in days.

The strong pound is a headache for Britain's exporters, but it is likely to reinforce international confidence in the City.

The prospect of a further dollar fall could undermine the willingness of investors to put their funds into American assets.

It comes as figures from the Centre for Economic and Business Research point to record levels of employment in the Square Mile and Canary Wharf.

There are currently 335,000 City-type jobs in London compared with 324,000 last year.

Meanwhile, the lord mayor of London, John Stuttard, will tomorrow announce an international marketing push on behalf of City companies. He will unveil plans to lead an unprecedented blitz of visits to foreign financial centres over the next six months.

The campaign will start with a visit to Kuwait in the middle of this month.

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