Politicians and Wall Street are howling that the US is losing its financial edge because of Sarbanes-Oxley. The law, we have been told, is causing the world's leading companies to shun Wall Street and US capital markets.

We've had the McKinsey report, released by US Senator Charles Schumer and New York Mayor Michael Bloomberg, as reported here, and President Bush has got in on the act, as reported here.

What then to make of this piece from The Wall Street Journal? It cites a Thomson Financial study which finds little evidence of foreign companies shying away from the United States. In fact, quite the reverse.

The WSJ reports:

"The study found foreign IPOs, excluding investment funds and closed-end funds, accounted for 16% of the 208 IPOs in the U.S. last year, the highest proportion of foreign IPOs in Thomson Financial's 20-year review.

"The 34 foreign IPOs in 2006 equaled the total in 2005 and represented the highest level since Sarbanes-Oxley was enacted, Thomson Financial said.

"The data-tracking firm also found that foreign IPOs in the U.S. last year raised $10.6 billion of the $45.3 billion in IPO offerings priced in the U.S. It represents a 23% share of IPO volume sold last year, the highest level since 1994.

" 'In terms of proceeds raised by foreign issuers and the number of deals by foreign issuers, the statistics show that things look rather healthy,' said Richard Peterson, director, Capital Markets Research at Thomson Financial. And in the aftermath of Sarbanes-Oxley, there doesn't seem to be any really significant deterioration of the IPO market.' "

The reason for that is obvious. The world's biggest capital market still attracts more money and investors than anywhere else, and foreign firms can get more for listing in the US than they can elsewhere. You can read more about that here.