UK
The Mayor of New York has reportedly hired McKinsey & Co. to investigate why and whether Wall Street is losing ground to the City of London. One reason could be that US bankers are reportedly only too happy to come and work here.
Jonathan Dover, consultant at London financial services recruiter EM Finance, says the company has placed several New Yorkers in corporate finance, hedge fund and alternative investment roles in the City.
Jo Cohen, manager in the finance division of recruitment firm Huxley Associates, tells us US statisticians are coming to London because the US market is weak in this area.
“The US stat arbitrage markets have not been performing well,” she says. “But they have lots of talented and experienced quants and technology specialists, who are among the people contributing to the New York brain drain.”
The New York Post yesterday reported that the city’s Economic Development Corporation had just approved a $600k contract with McKinsey & Co., to provide a “comparative analysis of the respective financial services sectors of NYC and London and a determination of their current potential strengths and weaknesses”.
Similarly, the Financial Times today reports that one senior official at Citigroup, the archetypal US bank, expects the company’s American corporate and investment banking revenues to be eclipsed by those from the European, Middle East and Africa (EMEA) region, the headquarters for which are guess where? London.
However, the City may not retain its status as global talent magnet for long. EM Finance says an increasing number of international financiers are eyeing the Middle East, where job opportunities are considerable and “you can typically move into a role several notches higher”.
A major reason a number of people are leaving NY for London is the sudden reduction by Congress in the number of available H-1B visas each year from over 200,000 to 65,000 (of which 10% are set aside for citizens of Singapore and Chile). The visa year runs from October to September, and the quota is hit usually by February leaving any skilled non-US workers unable to enter the United States to work. While Congress has effectively closed the door to skilled foreign workers, the UK has capitalised on this and readily permits skilled workers who are additive to the economy (and the tax base) into the country promptly.
Over the long term, the US will see significant impact from this hinderance on skilled workers in finance, technology, law, science, and other fields as intellectual capital is attracted to countries which readily welcome it, as opposed to actively shun it.