London is struggling to hold its ground in the global credit rout, yet powerful forces still support its emergence as the world's undisputed financial hub.
The UK capital has long dominated trade in foreign exchange, international bonds, foreign shares, and over-the-counter derivatives, while New York boasts massive domestic markets and unrivalled hedge fund and private equity assets.
Right now, London's value as a physical place to do business is tumbling because of its very reliance on financial services.
No other major global office market has seen as big or as fast a correction in the last year - from Madrid to Dubai, Mumbai to Hong Kong, and New York to Orange County - as people hired to lend money get fired.
But London's financial hegemony has grown in recent years as economic power has shifted east with the rise of Asia's mega-markets and the surge in petrodollars. That process is far from spent, despite the damage inflicted by the credit crunch.
Central London office prices have fallen by a fifth in the last year as the city's financial industry sheds a chunk of its 350,000-strong workforce.
In the City banking district, office rents are about 10 percent down on last year's peak. Sooner or later that should hit the hedge fund haunt of London's West End - the world's most expensive office location.
There is also worse to come as the UK economy flirts with recession and City landlords battle to attract tenants through a rising tide of office developments.
Luckily for London, the 2,000 year-old city has more going for it than just the towering City and Canary Wharf financial districts and cranes that dominate its skyline.
The strong euro has delivered a stream of tourists from mainland Europe and helped to keep shop tills ringing even as retail sales weaken elsewhere in the UK.
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But with financial services making up one seventh of its economy, London is clearly vulnerable - and some commentators see financial services going through a period of structural, not just cyclical decline.
