The pendulum swing away from the free market towards state-directed capitalism in the wake of the financial crisis is manifesting itself in increasing direction of financial services and the wider economy.
Governments are also becoming more competitive in the way they vie with other states for talent, investment and the primacy of key financial, industrial and other productive centres in the countries they govern.
Costs to governments of supporting the financial sector
As economies mature, public spending as a percentage of GDP typically increases, making governments important potential investment partners in emerging markets.
Public private partnership (PPP) investment around the world rose from US$50 billion in 2002 to US$170 billion in 2010.
Profitability and growth are likely to be more dependent on the fortunes of the real economy than before the financial crisis, which will in turn be more closely tied to government policies.
As such, it will be important to work with industry and consumer groups to help influence and shape government policies. It will also be important to develop a strong relationship with government to make sure your strategy anticipates and is aligned to government priorities and investment plans.
|If you have any questions, please contact
Global Leader Financial Services
Tel: +44 (0) 20 7213 3960
Author and Global Leader for Project Blue
Tel: +44 (0) 20 7804 0130
Q: Will London and New York remain the world’s pre-eminent international financial centres over the next 10 years?
London and New York will continue to dominate
London and New York will remain important, but increasingly other financial sectors will dilute their influence
Emerging financial centres will replace London and New York as the world’s leading international financial centres