The McKinsey study on New York's status as a financial center reported that that London beats the pants off of New York when it comes to the derivatives markets. "London already enjoys clear leadership in the fast-growing and innovative over-the-counter (OTC) derivatives market. This is significant because of the trading flow that surrounds derivatives markets and because of the innovation these markets drive." That may seem like the conventional wisdom, but the International Swaps and Derivatives Organization (ISDA), the leading derivatives trade group, isn't on board with such a conclusion. The market does seem to be more active in London, but it's unclear what anyone can do about it. Is it up to the exchanges to develop these markets, or the big banks? It may not be a purely regulatory issue.

For more:
- here's an article from Investment Dealers' Digest (for FierceFinance) readers