ABSTRACT

The rebirth in the past forty years of London’s City as a world financial center is as impressive a success story as is Silicon Valley. The City today is not nearly as powerful or as important as it was in the hundred years between Waterloo and the First World War. Still, today’s City, through its interbank market, is the banking system’s “central banker” worldwide. It is the world’s largest foreign exchange market. The money for medium-term financing (e.g., “bridge loans” or the financing of mergers and acquisitions) may be raised in America, but more often than not the structure of these complicated deals is being worked out in London. Even in long-term financing such as underwriting, the City is outranked only by New York.