THE US cemented its dominance in financial markets in 2008 at the expense of Europe, according to the International Financial Services London (IFSL) annual report.<br /><br />The Financial Market Trends Europe vs US report showed that the US financial markets had increased in size compared to Europe across eight different indicators, such as foreign equity trading, equity market turnover and domestic bonds. <br /><br />The IFSL said that, in most cases, this was because US markets had declined by less than those in Europe.<br /><br />But the report also showed that Europe&rsquo;s position relative to the US improved in six markets, including international bank lending, foreign exchange turnover and insurance premiums.<br /><br />The IFSL said the largest relative gains in both continents in 2008 were in those markets where each was already stronger. <br /><br />The relative positions remained unchanged in three markets: high net worth individuals&rsquo; assets, funds under management and private equity funds raised. <br /><br />Over the longer-term, between 2001 and 2008, Europe&rsquo;s share has risen in 13 out of 17 markets where data was available.<br /><br />The report said that the long-term trend &ldquo;demonstrates London&rsquo;s continuing importance as the capital for many of Europe&rsquo;s wholesale financial markets&rdquo;.<br /><br />The report also noted that in eight out of 18 activities, including commercial and international banking, insurance premiums, foreign exchange trading and over-the-counter derivatives trading, activity in Europe outstrips the US.<br /><br />&ldquo;Recent trends have been slightly less favourable for financial markets in Europe but, led by London as its financial capital, Europe has the opportunity to build on its cluster of expertise,&rdquo; said IFSL director of economics Duncan McKenzie.