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US financial markets grow
The size of financial markets in the US last year improved relative to Europe by eight different indicators, according to the latest annual report from International Financial Services London (IFSL).
The report, Financial Market Trends Europe versus US, said the US had increased its size of financial markets in eight out of 17 indicators, including funds under management, equity market turnover and domestic bonds.
Europe's share rose relative to the US in only six financial markets, while there was no relative change either way in the three remaining indicators.
Europe's increase in share included international bank lending, foreign exchange turnover and insurance premiums.
But over the longer term, Europe's share of 13 out of 17 financial indicators rose relative to US between 2001-08. The US increased its share relative to Europe in just four markets.
The largest relative gains in Europe and the US in 2008 were in those markets where both regions were already strongest.
The report said: "This long-term trend demonstrates London's continuing importance as the capital for many of Europe's wholesale financial markets."
The IFSL found the total amount outstanding of all domestic bonds issued by government, companies and other institutions in the US stood at $24.6trn (£15trn) at the end of 2008, about 50 per cent higher than the $16.1trn issued in Europe.
In the fund management sector, the US accounted for a half of global assets under management, totalling $62trn at the end of 2008 compared with Europe's third.
The US also remained the major player in the hedge fund industry. Hedge funds under management in Europe fell by 30 per cent from $473bn in 2007 to $330bn in 2008.
The US saw a 28 per cent drop in assets from $1.4trn to $1trn.
Hedge fund assets managed in Europe are 32 per cent of the US.
However, Europe is the largest market for foreign exchange trading, accounting for an estimated 60 per cent of trading worldwide in April 2008, according to the report.
Duncan McKenzie, director of economics at IFSL, said: "Recent trends have been slightly less favourable for financial markets in Europe, but Europe, led by London as its financial capital, has the opportunity to build on its cluster of expertise."
