Bulge bracket banks make capital the centre of their European operations

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The Independent Online

London may be home to 7 million Londoners, but it is also the world's pre-eminent city for share dealing, banking and the money markets.

London may be home to 7 million Londoners, but it is also the world's pre-eminent city for share dealing, banking and the money markets.

The capital's economy has been given a massive boost from the collective decision by this multi-trillion pound industry to centralise its key operations in the City. This has meant a large inflow of well-paid workers, all looking for a home.

The view from the London Eye - the giant rotating wheel on the south bank of the Thames - reveals a forest of construction cranes on the skyline of both the City and its new rival Canary Wharf, in Docklands, east London.

HSBC, the UK's largest bank, is building a 40-storey skyscraper in Canary Wharf. On the other side of the old West India Quay, work is under way on the tower block that will house the European headquarters and trading floor for the giant US investment bank Schroder Salomon Smith Barney. Five miles to the west in the City of London, Merrill Lynch, another US investment bank, is building a new purpose-built European HQ near St Paul's Cathedral.

In fact, almost every single American investment bank has its European base in the UK capital.

A recent report from the Bank of England showed that London is home to more overseas financial institutions than any other city.

It found that London was the most popular city for treasury and risk management, foreign exchange and international bond and equity trading. It was also the leader for corporate eurobond and equity issues and for international fund management. The only areas where London did not have pole position were bond and equity sales and back-office processing.

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