Isn't it part of the City of London's self-promotional myth that -- no matter what the UK's own balance sheet, be the nation hegemonic creditor or post-imperial debtor -- the CoL has amassed such formidable financial smarts over many generations that it has the potential to stay a global financial powerhouse indefinitely? If I'm not mistaken, though, the CoL's Thatcherite revitalization that began with the deregulatory "Big Bang" of Oct. 1986 has fulfilled its promise simply by making the London Stock Exchange unbeatably lax in oversight, a real anything-goes place to issue and trade stock. The post-Enron NY Stock Exchange -- burdened with all sorts of noisome requirements for better transparency, corporate governance, etc. -- gazes with rapt envy at today's LSE, which surely has the most permissive capital markets environment since the catastrophic South Sea Bubble of 1720. It's hard to see the supposedly robust, contemporary LSE as anything but an accident waiting to happen.
I suspect when the myth of Anglo-American superiority in financial know-how is finally dispelled, the UK/US will have little economic future except as tourism centers -- places where wealthy travelers from today's "emerging markets" will come to gawk at the decayed splendors of two utterly vanquished imperial colossi.
Carl
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