Not too long ago, lots of executives were concerned that the United States--New York City in particular--was losing its stature as the world's financial capital. Some of that concern stemmed from the then-lackluster IPO market at home, while the IPO market in London seemed to be faring better. That was always somewhat of an illusion, to be frank.

The truth about the IPO market in London is that it works much less efficiently that the market in the United States. This has become even more apparent this year. Bank of America and other top banks have publicly called for reforms as the problems continue to mount and more companies lose confidence.

The Financial Times notes:  "Blame for the failures has been flying around the market for months. Investors say issuers and bankers are too greedy; fees are too high and opaque; the syndicates of banks brought in to sell an issue are too big and advisers and issuers are in too much of a hurry. Above all, they say, issues are overpriced. In the worst cases, investors say companies without any kind of track record have been loaded with debt, dressed with a new set of non-executive directors and then the issuers expect them to be priced at premiums to their well-known, publicly-listed peers. Bankers, equally frustrated, accuse investors of failing to give honest feedback to advisers, in an effort to push prices down to unrealistic levels, and declining to see the management of mid-sized companies ahead of potential IPOs. They also argue that turbulent markets are the main cause for the disappointing performance of many newly listed companies."

The last few months have seen scores of companies scrap IPO plans in Europe. And that has not gone over well. Meanwhile in the U.S., the market is holding up. In the first half of the year, $25.7 billion was raised by 78 public offerings. That compares with $38.7 billion and 154 IPOs for all of last year, and $21.9 billion and 63 IPOs in 2009, according to Renaissance Capital. The pipeline of companies filing to go public has grown to 157 so far this year, compared with 258 for all of last year and 119 in 2009.

For more:
- here's the FT article

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