I can hear them already, Tin Cups shaking on Wall Street. No, they are not looking for the spare change or a Dollar Bill that you might give a panhandler in Manhattan, or the money that you might drop into the violin case of a starving music student performing in the Subways of New York. Rather, they are looking for the freedom to Do Their Own Thing.
Recent charges against two Major British Banks, Barclay’s, for the LIBOR Manipulation Scandal, and Standard Charter, for Money Laundering centered on Iran, have gotten the Brits in a Twit. They claim that the US Regulators are trying to take London’s Claim as the International Financial Capital away, and leave New York as the logical choice. Rather than push back, American Banks seem to be using that assessment for their own advantage.
I believe that there will always be a shared role as the World’s Financial Capital. The US, having the largest economy, reasonably efficient markets and being the only Worldwide Reserve Currency, will always be a key player. When the US Markets open, however, Europe will be closing-out their trading day a couple of hours later and most of the rest of World Markets are already closed. London, on the other hand, has a daily time overlap with most other Financial Capitals and the travel time is greatly reduced–as compared to New York.
But, I sense that the Big US Banks, most are the so-called “Too Big to Fail” (or Too Bigs), will be claiming that the US Regulators will put them at a disadvantage in the World’s Marketplace due to too much regulation. And, of course, European Banks will use this as rationale for fighting the Necessary Regulation on their operations. ME! ME! ME!
Do we really want to trust the Too Bigs, on both sides of the Atlantic, to do the right thing? I THINK NOT! What have they learned after they were bailed-out in 2008? They committed one transgression after another, no Jail Time except for Insider Trading, Shareholders paid the Fines; but, of course, they received their Year-End Bonuses. Who else do you know gets a bonus when they commit crimes and their Banks have to be Bailed-Out?