London's challenge rattling Wall Street

NEW YORK - New York Mayor Michael Bloomberg has commissioned a "battle plan" to help Wall Street beat off a challenge from London by luring more foreign companies to its stock exchanges.

McKinsey, the management consulting firm, has been asked to examine London's success, and to report back urgently with proposals to help "retain New York City's position as the financial capital of the world".

Wall Street bosses have become alarmed that London has won more than twice as many of the largest flotations of the past two years.

Mr Bloomberg's intervention comes amid a gathering backlash among US businesses to the Sarbanes-Oxley laws introduced in the wake of corporate scandals such as Enron.

The laws, which require much more detailed auditing of company accounts, have added millions of dollars to the cost of floating and running a US-listed firm, and have acted as a deterrent to smaller companies in particular which might want to float.

When Mr Bloomberg's opposite number, Ken Livingstone, visited New York recently and was asked about his economic development strategy for the City of London, he answered in two words: "Sarbanes-Oxley".

Daniel Doctoroff, Bloomberg's deputy mayor for economic development, said McKinsey would report back within two months on policy proposals and a comparison with initiatives planned in London.

"We want to determine the greatest opportunities and challenges for New York City's financial services sector, including those posed by regulatory environment," Mr Doctoroff said.

- INDEPENDENT