Nice work - but can London get it?
Jinfo Blog

By Tim Buckley Owen

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Time will tell whether the British decision to veto European Union treaty changes designed to save the euro ultimately protects its financial services industry or risks London being sidelined. There’s already evidence from New York that downsizing among Wall Street firms is affecting financial data suppliers, and one has to wonder whether London might face special challenges on top.

The New York warning comes from an article in the Wall Street Journal in which Russell Adams suggests that the old rivals Bloomberg and Thomson Reuters are bracing themselves for a period of retrenchment as the firms they serve shed jobs. In London, that trend could be further exacerbated if, as the BBC’s Robert Peston reports, business’s unease at the possible effects of the British veto turns out to be well founded.

At the moment, though, the two rival companies scarcely seem to be evenly matched. Bloomberg seems in rude health, while it appears that Thomson Reuters has some work to do.

In an article Newsweek magazine’s Nick Summers has highlighted Bloomberg’s canny diversification from business to government information, including its purchase of the Bureau of National Affairs (see VIP Wire report and subsequent LiveWire comment). Now, as Bloomberg seeks planning permission for a new headquarters in London, Summers further reports speculation that it may be contemplating swallowing up the Financial Times – speculation that could become more intense now the FT’s parent Pearson is withdrawing from any involvement in financial data by selling its share of the FTSE Index (see Penny Crossland’s LiveWire comment).

Contrast this situation with that of Thomson Reuters. It recently announced a reshuffle at the top that will include the departure of its chief executive Thomas Glocer on 31 December. Glocer is credited with having turned Reuters round, leading to its eventual sale to Thomson – but the Economist magazine observes that Bloomberg has almost wiped out TR’s market lead during Glocer’s stewardship and that TR’s Eikon trading terminal (more LiveWire comment from Penny Crossland) hasn’t competed well with Bloomberg’s.

However the Economist does see opportunities for both companies in providing trading services, as greater regulation forces more private over-the-counter deals onto open exchanges. And Thomson Reuters’ latest Governance Survey tends to confirm that more regulation offers lucrative opportunities for business information providers.

Small wonder. The FT reports TR as saying that financial services firms are being hit with an average 60 regulatory changes every working day – a 16% increase on last year – and the latest Outsell Governance, Risk & Compliance report forecasts seven to nine per cent growth in the segment in 2011.

Nice work if you can get it. But it remains to be seen whether London will stay in the thick of it or increasingly shiver on the sidelines.

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