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March 22, 2007
Financial competitiveness - part 5
From the New York Times' financial industry blog DealBook Big Ben Versus the Big Apple: Another Take come this insight on our financial competitiveness:
In comparing Wall Street now to the Wall Street of the dotcom boom, people often forget one issue: The wealth then grew largely from a slew of stock offerings that should never have happened. What happened then in New York is taking place now in the foreign exchanges, according to Jeffrey Garten, a professor of international economics at Yale:
"When you analyze why London is getting more than its share of IPOs, you realize that a lot of them really should not be listed in the U.S., given our tradition of investor protection. Many come from emerging markets, particularly Russia and China. By any standards, they lack accounting rigor and transparency."
This reminds me of the classical study of industrial policy using the case of the NE fishing industry. The industry set its benchmark as the high point during WWII when meat was scarce and the demand for fish artificially high. Sometimes the industry just doesn't understand the situation.
By the way, the DealBook has published a number of items on the health of the financial markets.
Posted by Ken Jarboe at March 22, 2007 8:02 AM
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