ent economically and politically reigning over the world, but the rapidly emerging economic power of China and Japan is also an undeniable fact; which is the precursor of the second global shift. An emergence of competitors in the shape of China and Japan is adversely affecting the economic power of the USA. The resurgence of Asia especially East Asia is undoubtedly, the most significant global shift in the geography of the world economy during the past 40 years. (Dicken, 2007, p. 43)
Another very important fact is the complex geography of the product manufacturing process. “In other words, economic activity is becoming ‘deterritorialized’ or ‘disembedded’.” (Dicken, 2007, p. 18). For example, open boarders today allow some parts of the product being made in one country and it’s assembling being done in another. The purpose of this paper is to highlight the influence of the second global shift on the financial service industry, particularly the European financial services. Moreover, we will examine how this global shift will change the structure of financial groups in Europe.
The first global shift is the period of time when economic and political power was shifted from Britain and some European countries to the United States. This shift started occurring after the Second World War when United States appeared as a supreme economic and political power. After 1945 the world was dominated by two blocks i.e. the United States with its allies and the Soviet Union with its allies. This division was not only confined to economic differences but to socio-political differences as well. This is when the silent strain between the capitalist and the communist world began. “Hence, the world economic system that emerged after 1945 was, in many ways, a new beginning. It reflected both the new political realities of the post-war period – particularly the sharp division between East and West _ and also the harsh economic and social experiences of the