europhobia

[Henry C.K. Liu]

Another highly significant advantage of London over Frankfurt and Paris is that
the legacy of the established financial/legal structure dating back to two
centuries of the British Empire which laid the foundation of modern finance.  Much
of cross border finance in globalization today is executed under British law.  And
English is the global banking language.  Every international banker, being he/she
French, German, Italian, Spanish, Mexican, Japanese, Chinese, Indonesian etc,
speaks fluent English. The most important finance centers in Asia, Singapore and
Hong Kong, are both former British colonies.  This also explains why so much
foreign exchange and structured finance/derivatives, bonds and debt instruments
trading take place in London.  Every major American law firm has a sizable London
office and British American mergers in the law profession has been commonplace
since the big bang.  Of course, American finanial institutions own half of the
City.
Another way of looking at London is that through deregulation, London is in fact
an America financial outpost for Europe and  Russia and also for East Asia.
One of the unspoken reason the Japanese adamantly refuse to liberalized the Tokyo
financial markets is that they do not wish to have Tokyo turn into a London of the
East, dominated by American capital.  Unruly members in the Diet have raised this
issue countless time in debates which the official Japanese press usually plays
down for fear of upsetting Washington.

Henry C.K. Liu

Chris Burford wrote:


> At 20:55 06/01/99 -0000, Sol wrote:
> >The piece under Blair's name in the WSJ seems to be part of a charm offensive
> >belatedly launched from London when Brit ruling circles as usual realised too
> >late that the perfidious continentals are aiming to use the Euro and their
> >greater unity within the EU to attack London's dominance as the main global
> >centre for 'offshore' finance. The laser shows and general jollifications in
> >Frankfurt for the Euro-launch made London seem peripheral, so we had Eddie
> >George, Bank of England Governor, on the radio to reassure people that London
> >will still be Europe's financial capital.
> >
>
> I agree that London is under serious pressure now and ultimately this is
> what matters over 20-30 years. Britain punching above its weight because of
> its willingness to join in military activities with the USA, giving it a
> semblance of international credibility without having to win true
> consensus, will not last for ever, and can be finessed.
>
> An article in today's International Herald Tribune details the common
> criticism of Britain's attempt to straddle Europe and the USA. The
> Europeans, that is the real Europeans (!) are well used to handling this.
> One lever will be for Europe to take more of a lead internationally,
> including militarily. Another will be around the unification of Europe's
> defence industry, from which Britain cannot afford to be left out.
>
> Another may be moves towards global financial management, with Europe and
> Japan now ready to be more interventionist, despite US reluctance. Britain
> may promote this in order to be able to straddle the Atlantic a bit longer.
>
> Whether this is ultimately possible depends on how much you believe in
> ultra-imperialism. I do not think that nowadays inter-imperialist rivalry
> automatically leads to war. There are many other ways the conflict can be
> managed. But that does not mean that such conflicts have disappeared, or
> are unimportant.
>
> London presumably hopes it can retain its advantage over Frankfurt by
> reason of having the lead in the west European time zone, and by the more
> international nature of its city. But Frankfurt is the centre of the
> concentration of capital represented by the Euro, and it surely must grow
> in dominance. The complex process of unification of the European Stock
> Exchanges may disguise much of this rivalry, and the results may depend on
> the unpredicted workings of certain details that cannot as yet be foreseen,
> but of the technical sort that Sol describes. Yet the ultimate gravity
> towards Frankfurt ought to prevail.
>
> Meanwhile an opinion poll in yesterday's Guardian shows majorities against
> Euro entry in all strata of the British population, and in both genders. It
> is unlikely that Labour would like to take on an open referendum campaign
> for entry, this side of the next election.
>
> Chris Burford
>
> London