London Benefits From US Brain Drain?

This piece by Philip Aldrick in London's Daily Telegraph caught my eye for three reasons.

First, because any headline with the words "American brain drain" is attention-getting by itself.

Second, because I've seen news reports about foreign companies de-listing their ADRs due to the burdens of complying with Sarbanes-Oxley.

And third, because Aldrick's article jives with what I've heard about London's City financial district -- that it has become known as "Hong Kong West."

Anyway, on to the piece:

The City of London will become an even stronger magnet for talent from both the US and eastern Europe over the next decade as it cements its reputation as the "cosmopolitan capital of commerce", a new in-depth study claims. The trend will emerge by 2015 as restrictive regulations in the US drive companies and executives to London, while the capital's hedge funds draw skilled mathematicians and actuaries from eastern Europe.

The size of the highly-skilled migrant workforce is likely to result in fewer bonuses for bankers and greater pressure for Europe's financial centres to deregulate, the report by IBM's Institute for Business Value and The Economist Intelligence Unit says.

Some of the 402 executives from 296 of the world's largest financial institutions interviewed said there would be a US "invasion" of London, as companies and executives flee Sarbanes-Oxley [financial disclosure rules] and other restrictive regulations in the US that take up "20pc to 30pc of financial markets managers' time". One unnamed chief strategist said: "America is taking over London. Generally speaking, the London economy will benefit because there will be increased competition."

Then, further down, the article ends with this:

Sarbanes-Oxley has often been cited as a deterrent for companies looking to invest in the US. Kazakhmys, the FTSE 100 copper miner, is thought to have chosen London for its recent listing to avoid the burden of US regulatory compliance and several UK companies have removed their secondary US listing for the same reason.

I have no firsthand knowledge of any of this. Any readers working on Wall Street or in the industry and care to comment, please do.