The collapse of Northern Rock has seriously damaged the reputation of London's financial institutions and the important city traders according to the FT.

"The brand of London has taken a hammering because of Northern Rock," said Tim Linacre, chief executive of Panmure Gordon speaking to the FT a City stockbroker that also has a large US presence. "I don't think it is terminal but London needs to be absolutely on its toes."

In a comparison to New York the FT said “in 2008, through June, nearly $25,000bn worth of shares changed hands on the New York Stock Exchange and Nasdaq, up a combined 18 per cent on the same period last year. Trading on the London Stock Exchange dropped 29 per cent to £4,000bn, according to the World Federation of Exchanges.”

New York also remains the premier city to investors for alternative investments.

“More than 13,200 private equity professionals, roughly one of every six worldwide, are based in New York compared with 7,100 in London, according to Prequin, an intelligence service.”

“The number of hedge funds worth more than $1bn (€682m, £544m) located in New York rose from 123 last year to 144 this year and their collective assets jumped from $650bn to $973bn, according to Hedge Fund Intelligence. London remains a distant second. It added just two new large funds year on year and now has 75 $1bn funds managing $348bn.”

In terms of companies listing London still beats New York with the recent example of Indian companies choosing London over New York to raise finance.

London is also suffering from a change of emphasis from listed companies moving their HQ's away to more tax efficient cities like Dublin, or in some cases Monaco or Cyprus.