by Jami Miedema

Browsing through the headlines of any newspaper, it is easy to wonder if the heyday of the United States is entirely over. Although we have been a superpower for quite some time, the shift of power to other emerging nations, such as China and India , is approaching. Having already lost our lead in the manufacturing industry, we are starting to see our hold on the financial sector slip as well.

In 2002 the Sarbanes-Oxley Act was implemented. This new set of reforms established rigorous standards to which publicly traded companies must adhere. Perhaps some of the decline we have seen in the financial sector is due, in part, to these new regulations. Overall, there has been a shift of capital from the Big Apple to London . Wall Street has lost numerous IPOs over the past few years, while London has gained many international ones. One reason for this displacement may be because the underwriting fees for IPOs are significantly lower in London than they are on the New York Stock Exchange (NYSE). Another factor could stem from the suggestion that investments abroad may be more lucrative than in the United States . To gain back what we have lost, the government may need to impose or reconsider some policies. But would this be enough to regain our position on top?

With all the cash flowing out of the US , one must question the future of the financial sector here. Can Wall Street make a comeback with the help of the government? Or is our time as a superpower finally up?

Gapper, J. (2006, Nov 27). “The Big Apple’s glory days have passed.” Financial Times , pp. 13.