Think London Boss Opts to Think New York

The Financial Times
September 19, 2007

By Christopher Grimes in New York
Published: September 19 2007 23:37 | Last updated: September 19 2007 23:37

New York has stepped up its fight to improve its global competitiveness with the poaching of a senior executive from a London-based business advocacy group for a rival group made up of 200 of New York’s most powerful chief executives.

Diana Torres, formerly head of US operations for the British inward investment agency, Think London, will establish an office on competitiveness at the Partnership for New York City.

She will be responsible for easing the mix of red tape, restrictive immigration policies and tax issues that are thought to be eroding New York’s competitive position in financial services.

The Partnership’s members include Chuck Prince, chief executive of Citigroup, News Corp’s Rupert Murdoch, Henry Kravis of Kohlberg Kravis Roberts and Stephen Schwartzman of Blackstone Group.

The move reflects the pressure New York’s business and government leaders are feeling from London and emerging financial centres in Asia as London, in particular, eclipses the city in areas such as foreign exchange trading and credit derivatives.

In 2006, London had 503 new equity market listings, compared with New York’s 211. New York’s bonus pool was greater, at nearly $24bn (£12bn, €17.3) to London’s $17.6bn, and it had a slight edge in total financial services jobs. But New York is keenly aware that the UK’s friendlier regulatory environment and more open immigration policies are giving London an edge.

Earlier this year, Michael Bloomberg, New York’s mayor, and New York Senator Chuck Schumer released a report by McKinsey in which the consultancy outlined a number of threats to Wall Street’s position in financial services.

Ms Torres said much of the rivalry between London and New York was overstated, adding that the two cities should collaborate to fend off new competitors, such as Shanghai, Dubai, Mumbai and Hong Kong.

“The two cities are more interdependent than truly competitive,” she said.

But her mission will be to help New York regain its lost market share - a task that will require lobbying to adapt US laws, including ones on such politically divisive topics as immigration.

The Partnership was the leading force in lobbying for a London-style congestion charge in New York, an idea that was adopted this year by Mr Bloomberg.

Ms Torres said other changes that would benefit New York had already been made, including moves by the Securities and Exchange Commission and the Public Company Accounting Oversight Board to ease financial reporting requirements.

She will add her voice to the many in the US business community clamouring for the US to offer more professional visas while relaxing restrictions on short-term business travellers.

New York lost a derivitives trading business to London because the firm could not get enough of its employees into the country.