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Since the days of America’s first Treasury secretary, Alexander Hamilton, New York’s financial markets have driven and sustained the nation’s economy. And for the last century, companies worldwide that sought to raise capital overwhelmingly came to the United States.

Sadly, and distressingly, that era may be coming to an end, as companies looking for money on the public markets are increasingly going to Europe or Asia. In 2005, initial public offerings of stock in Europe surpassed those in America — in both number and dollar volume. Even as the American IPO market improved in 2006, that trend accelerated: According to PricewaterhouseCoopers, there were 651 IPOs in Europe last year, versus 224 in the U.S., and the European offerings raised almost $40 billion more dollars. China’s markets, with fewer IPOs, raised 30 percent more capital than those in the United States.

WashingtonPost.com: Are U.S. IPOs DOA?

The City has thrown its support behind European Commission proposals to strengthen the regulation of auditing firms that sign-off the accounts of companies listed on European stock markets.

But Britain’s audit watchdog,the Financial Reporting Council, and the big accountancy firms remain concerned over how and when the new rules will be applied.

The directive gives national regulators the power to force the auditors of any company seeking to issue shares in Europe to meet European standards. Those auditors from countries not deemed up to scratch will have to register in Europe and be subject to regular inspections.

A similiar regime in the US, introduced via the Sarbanes-Oxley Act, led to an exodus of foreign companies from US exchanges.

Telegraph.co.uk: EC to adopt pragmatic view on audit directive