If Offor decides to keep ERHE and build an oil company, we will probably be moving to the AIM
By David Wighton in New York
Updated: 2 hours, 44 minutes ago
New York is facing a threat to its position as the world's leading financial centre, according to a report commissioned by Michael Bloomberg, the city's mayor, and New York Senator Chuck Schumer.
If current trends continue, New York could lose up to 7 per cent of its market share, equivalent to 60,000 jobs, over the next five years. But much of that loss would be prevented if the US implemented legal and regulatory reforms, says the report by McKinsey, the consultancy.
Mr Bloomberg and Mr Schumer commissioned the study amid increasing concern over New York's declining share of global capital markets activity.
Concern has focused on the rise in the number of foreign companies choosing to list their shares in London and Hong Kong rather than in New York.
The report, to be published on Monday, says New York has also been losing out in areas such as derivatives, where Wall Street chief executives say they have been shifting business to London because of its more attractive legal and regulatory environment.
Financial services employment in London rose 4.3 per cent to 318,000 in the three years to 2005, while it fell by 0.7 per cent to 328,000 in New York, the report says.
Mr Schumer said the study showed that New York could lose its leadership "not just for IPOs but for all financial services, all too easily and all too soon".
McKinsey based the report partly on interviews with 50 financial services chief executives. There was a consensus that New York had become less attractive than London over the past three years, and many expected the trend to continue.
A senior member of Mr Bloomberg's staff said that while New York would lose some share because of maturing capital markets in Europe and Asia, the decline could be "substantially" stemmed if the report's "very realistic" recommendations were put into effect.
These include clearer guidance on the Sarbanes-Oxley corporate governance rules, securities litigation reform, promoting the convergence of accounting standards, and easing visa restrictions on foreign professionals.
John Thain, chief executive of the New York Stock Exchange, warned last year that the competitiveness of New York was being undermined by the litigious US climate and Sarbanes-Oxley.
The fears prompted the formation of a panel of Wall Street executives and academics, with the backing of Hank Paulson, US Treasury secretary. In November, the group called for similar reforms.
Chuck Prince, chief executive of Citigroup, recently forecast continued "diffusion away from New York". In the fourth quarter of last year, Citigroup's corporate and investment bank earned more in both Europe and Asia than in the US for the first time.
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