– Alexander Smith is a Reuters columnist. The opinions expressed are his own –
Some predict that the financial crisis spells the end for London as a major global financial centre, arguing it has thrived on lax regulation and a quasi-tax haven status and that the regulatory backlash which inevitably follows such a catastrophic economic debacle will suffocate the innovation and the financial incentives which have driven the growth of services in the British capital.
But these doomsters are overlooking key factors which have made London a world hub for centuries. London’s geographical position — most notably Greenwich Mean Time — has served it well as a bridge between the time zones, its almost unrivalled cultural diversity, its global outlook, the advantage of English as the common language of finance and not least the trading and financial heritage it has built up since Roman times.
Throw in the advantages of maintaining its own currency during a period of downturn (particularly when a weaker pound gives it an economic advantage) and London is well served alongside New York and Singapore, Hong Kong or Tokyo when competing with other centres which have harboured global ambitions such as Frankfurt, Paris or more recently Dubai.