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With its recent financial scandals, London is potentially facing a loss in its status as the world’s leading financial center. Trust in the city is plummeting and its identity will undergo a change, as reported by Bloomberg.

From the JPMorgan Chase & Co. (NYSE:JPM)’s trading loss initially estimated at $2 billion, and possibly as high as $9billion, UBS AG (NYSE:UBS) alleged $2.3 billion fraud and now Barclays Plc (NYSE:BCS) little LIBOR-fixing problem, London has taken a hit.

Not helping matters is the country’s double-dip recession; this hasn’t been seen since the 1970s.

Yes, the country’s economy has been impacted from financial services losses. The industry has gashed more financial-services workers than any other country both in 2011 and now in 2012, reported Bloomberg. From its nine bigger banks, four have either been nationalized or driven to accept state aid during the financial crisis; this has cost the U.K. the greatest amount of money for a project other than its world wars.

The government is also implementing budget cuts last seen in 1945; unemployment is 8.2 percent.

On the docket for financial services change is the industry’s bonuses, risk-taking and regulatory system. On the domestic front, the industry is losing support from its political parties–the Conservative and Labour parties along with the public.

Change is coming as Europe moves toward a single regulator for banks. For the U.K., it may either be excluded from this or be at a disadvantage in London. U.K. Prime Minister David Cameron is getting rid of the Financial Services Authority, which was created in 1997, and changing it to two regulators overseen by the Bank of England.

World’s Largest Financial Center

But just how concerned should London be about the change and the challenges? Just how large of a financial center is London?

It has 250 foreign banks and it is the world’s largest center for foreign-exchange trading and cross-border bank lending; it has trades with $1.4 trillion of interest in derivatives daily, reported the Bank for International Settlements.

In addition, financial services sits as the U.K.’s biggest export; it pays 12 percent of the country’s tax receipts.

But is London unique to these problems affecting its financial services identity? Don’t you think New York would face the same problems? Maybe not because we’re litigious here in the U.S. of A.

Paul Moore, who had been fired from his job from HBOS Plc after telling bank bosses that growth plans were a threat to stability said to Bloomberg, “In New York they have attorneys general who are dead keen on prosecuting people. We never prosecute in London.You can be a rioter and steal a water bottle and get put in prison, but if you are a director of a company that systematically mis-sells payment-protection insurance to people you can monetize it.”

For now, the recent scandals haven’t kicked London off its perch as the world’s top financial center while New York comes in at No. 2, according to the Z/Yen Group’s senior consultant Mark Yeandle.

He said to Blooomberg, “The events could easily have taken place elsewhere and New York has not been free of scandal itself. What could affect the perception of London’s competitiveness is how the regulators and legal authorities here deal with the guilty parties.

According to Mr. Moore we know how that may turn out.