Most Financial Markets Growing Faster in Europe than in US
While it may turn out that this is not something to be bragged about, most financial markets grew more rapidly in Europe than in the US, both in 2007 and over the last several years, according to International Financial Services London.
Key findings from IFSL’s annual report Financial Market Trends Europe vs.US 2008 show that in over half indicators - 10 out of 16 - financial markets in Europe grew more rapidly than the US in 2007. Over the longer period since 2001 activity in Europe rose relative to the US in 13 out of 18 markets.
Most of the gains over the past six years have been in 8 out of 9 sectors where activity in Europe is smaller than the US: these include hedge funds, securitisation and equity market turnover, IFSL said. Europe has also made some large relative gains since 2001 in sectors where it has the larger market, including IPOs, cross border bank lending, issuance of international bonds, and insurance premiums.
The US has made up ground in a few areas in recent years, particularly foreign equity trading, where the gap with Europe has been largely closed, as well as OTC derivatives where Europe’s lead has been curtailed.
The report is based on 2007 data when the credit crunch was in its early phase so does not take account of the deterioration in credit markets in 2008. Some indicators such as investment banking revenue, securitisation and IPOs are likely to fall in 2008, but it is not yet clear how this will influence the relative positions of the US and Europe in financial markets, IFSL said.
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