The City of London in the Asian crisis

This paper seeks to understand the Asian crisis through theeyes of the City of London. Relying upon material provided byThe Financial Times (FT), we construct an index of pessimismto chart the dominant City of London interpretation of the pathof the crisis. This index is set against data on the actualperformance of the Hong Kong, and Tokyo, London, and New Yorkstock markets over the same period. We have the luxury of retrospectivelyreconstructing the actual path of the crisis whereas the FT(and global financial markets) had to respond to specific eventsin a chain of apparent cumulative events. Our goal is to explainthe construction of the dominant pessimistic interpretationof the path of the crisis, placing the City of London in thecontext of global markets (in time, between Tokyo and New York).In the penultimate section of the paper we report on an interviewwith Riley, the FT columnist, about the results of our analysis,emphasizing the apparent homogeneity of information and opinionin the City of London as opposed to New York. The conclusionfocuses upon the implications of this argument for the studyof discontinuities between global markets, and the future offinancial centres.     

Cross-border corporate ownership and capital market integration in Europe: evidence from portfolio and industrial holdings

The level and determinants of cross-border holdings are evaluatedusing data on the ownership structures of 711 MSCI index companiesin 16 European countries. The level of foreign ownership inthe 16 countries is significant, but spread unevenly, with USfinancial institutions controlling the majority of foreign stakes.Countries' borders, rather than company size ranges are themain lines of discrimination between high and low levels offoreign corporate ownership. Major factors influencing the intensityof cross-border links include the proximity of investors tothe destination of capital, and corporate governance. From theperspective of international corporate ownership, the levelof capital market integration in Europe is low and the conceptof the pan-European company remains a long way from being realised.Implications are drawn for future research and integration policy.