The competition for supremacy in the financial markets between New York and london has become a hot story, with the current issue of New York Magazine dedicated to it, a lengthy New York Sun series comparing the cities, and the requisite Drudge link posted today. We've been posting on this for months now (here, here and here, for starters), but will offer a few points worth keeping in mind:

—London's improved position is in no small part due to the increased regulations of financial markets that came out of WorldCom, Enron and the other scandals here. While those laws are in need of reform, London has benefited from these changes and is now drawing more international business, much of it from developing and emerging markets, and some of it shady. Expect that city and country to have its own set of scandals down the road.

—London's markets have also been aided by the post-9/11 American travel restrictions, which are in need of correction. From our outside vantage point at least, we've come up with a system that burdens business and other travelers while doing little to improve security. This need not mean less vigilance, just smarter policies.

That said, it's surprising that even after 7/7, the threat posed by London's increasingly radical Muslim population, aided and abetted by Mayor Ken Livingston, advocate of a red-green alliance, has occasioned so little worry, let alone outrage.

—Finally, for all the hype, New York is hardly about to fall. the latest data from Pricewaterhousecoopers shows New York not only dominating London now in terms of GDP, but continuing to do so at least through 2020. What's more, the push locally by Mayor Bloomberg and Senator Schumer, and nationally by many others, to reform SarbOx and help keep America competitive should bear fruit soon, and help change the dynamic.

The key question remains: Will New York, which is utterly dependent on Wall Street, which provides 36 percent of the city's business income taxes in 2005, clean its own house by reducing the size of government, lowering taxes, and otherwise help strengthen the market? If not, it will be difficult to ward off the threat posed not only by London and Hong Kong, but also by Chicago.