March 18 (Reuters) – To understand why New York capturing
the title of world’s greatest financial center is no cause for
celebration, look no further than the Alibaba IPO.
Chinese e-commerce company Alibaba announced its intention
to list its shares in the U.S. rather than Hong Kong, a decision
driven in significant part by regulatory arbitrage, just hours
after the Big Apple captured the top spot for the first time in
a survey of global financial capitals.
The battle to be top financial center is a bit like hosting
the Olympics: the winner always loses but the athletes (or
bankers) do well out of the deal.
New York topped London for the first time in a ranking of
financial centers, according to the Global Financial Centres
Index compiled by London-based consultancy Z/Yen, with Hong
Kong, which lost out on the Alibaba IPO, in third place.
While clearly New York offers deep capital markets and
expertise, it seems one point was key in taking Alibaba halfway
round the world to list its shares: Hong Kong would not
countenance its executive-serving corporate structure.