In the months preceding midterm Congressional elections in the U.S., we saw countless stories on the devastating effects of Sarbanes-Oxley's too-strict audit requirements on U.S. stock exchanges. Foreign companies (and even smaller U.S. companies) were abandoning the New York Stock Exchange for less expensive, less restrictive markets like London's.
And London hasn't been complaining, by any means. One writer even went so far as to thank Rep. Michael Oxley and Sen. Paul Sarbanes, both of whom retired this year, for their generous contribution to London's economy.
A brand-new McKinsey report says New York stands to lose 60,000 jobs if Sarbanes-Oxley and the securities regulations aren't revised immediately. Not good news, to be sure. But if a recent Telegraph.co.uk report is true, London may not be celebrating as boisterously as it once was. The story says accounting rules attached to a newly adopted and soon-to-be-enforced European directive are just as onerous as Sarbanes-Oxley, if not worse. A London Stock Exchange official says he is concerned about unintended consequences of the directive, but not about losing listings.
Unintended consequences ... Now where have we heard that before?