Corporate Governance

From the Pages of The Pomerantz Monitor: The Best of Times and the Worst of Times

By Carolyn Moskowitz

The July issue of The Pomerantz Monitor reports that on June 12, MasterCard Worldwide released the first set of findings of its "Wordwide Centers of Commerce" report, including its Index ranking the top 50 cities worldwide on a variety of business functions. One of its key findings: London now leads the world as a center of commerce, overtaking New York, which came in second.

Although the rankings are based on seven different "dimensions," each of which is separately scored, one of the biggest differences was in "financial flow," which measures the volume of various types of financial transactions. Although New York came in second to London on this factor, there was quite a large gap between the two cities, which the report explained as being "due to London's much higher volumes in bond and derivatives trading." "This can be attributed to the impact of financial regulation in the 1990s" in the U.S, the report concludes.

Aha, you say, this is proof positive that "excessive regulation" is costing the U.S. its lead position in world commerce. Not so fast, we say. Another report, which appeared, of all places, in the New York Post, says that:

London's financial center is paying a steep price for its bragging rights as the world's best, as fraud is rampant and authorities can't seem to catch enough culprits. . . . London's top ranking has come at a price. The influx of new business has brought a 40 percent jump in financial fraud in Britain in the past year.   

Be careful what you wish for.

Full post as published by PomTalk on July 01, 2008 (boomark / email).