A new report from IFSL Financial Market Trends – entitled Europe versus US – suggests that, for the first time, many financial activities in Europe in 2003 outstripped those of the US and (in the majority of cases) have been growing more rapidly.
The findings point to the growing global influence of London as the capital of Europe’s wholesale financial markets. Financial markets, businesses and other organisations based in London have a substantial influence on activity throughout Europe, says IFSL, most notably where London gives access to global financial markets. IFSL argues that in making international comparisons between London and New York it is therefore valid to consider the scale of financial activity in Europe as a whole, not just the UK, to take full account of London’s sphere of influence. This can then be compared with the size of financial markets in the US, which represent New York’s field of influence.
“In 2003, not only was Europe found to be larger than the US in 8 out of 15 areas of activity featured in the report, but also in 9 out of 13 markets where data were available between 1998 and 2003, trading and activity in Europe increased relative to the US,” says Duncan McKenzie, Director of Economics at IFSL. “Most of these (6 out of 9) were in sectors where activity in Europe is smaller than the US pointing to a significant closing of the gap between the US and Europe.”