How is the financial crisis affecting the race for global pre-eminence between New York and London? The latest Global Financial Centres report from consultants Z/Yen Group showed that London had lost its lead over New York, leaving the twin sisters of global finance level-pegging.

Yet this is a marathon, not a sprint. In the longer run, the overall shape of regulation and tax, and more particularly the future handling of institutions that are too big or too interconnected to fail, will dictate the outcome. Here the picture is far from clear.

One reasonably safe bet is that a new Basel agreement, however onerous, will provide the basis for a level playing field on capital and liquidity. The unpredictability starts with unilateral measures, where the US is currently making the pace. While the Obama bank levy initially looked a potential shot in the foot for New York, it looks less so now that the political mood in the UK and continental Europe is moving to a more hostile stance on bank taxation. But it is hard to believe that the 1,336-page Dodd Bill on US financial reform – compare and contrast with the 1933 Glass-Steagall Act's 17 pages – will not give rise to the law of unintended consequences.