Despite a McKinsey report warning that New York faces a dire future as a financial centre if Sarbanes-Oxley isn't fixed, and despite the misgivings about SOX from Hank Paulson's crew in the interim report from the Committee on Capital Markets Regulation, SarbOx remains popular with investors, reports BusinessWeek.

True, the legislation has imposed costs on business but the benefits include more reliable financial statements and fuller disclosure, say the investors.

Expect this debate to rage for some time.

Speaking in Davos, China's top banking regulator Liu Mingkang, chairman of the China Banking Regulatory Commission, described Sarbanes-Oxley as the "right and correct response to the market", according to the DowJones newswires.

The other important point is that Sarbanes-Oxley looks like becoming the de facto global governance standard with other jurisdictions moving closer to the US regulatory model.

"Pretty soon the vast majority of Sarbanes-Oxley will be applicable either at the European level or at the national levels. The regulatory costs are in the process of converging," Andrew Bernstein, a Cleary Gottlieb partner in Paris who advises many French corporations told The Wall Street Journal, republished here via the Pittsburgh Post-Gazettte.

As the WSJ piece points out, if the US markets are becoming increasingly unattractive places for companies to list shares, the shift might have more to do with the changing nature of global finance and capital. Global capital is now more fluid, and with foreign stock exchange standards strengthened and harmonised, investors are parking their money in markets where there is more liquidity. And in a globalised economy, there's less prestige attached to listing in the world's biggest capital market.

And that's exactly where the problems with Sarbanes-Oxley kick in. The premium attached to shares listed in the US has shrunk as a result of these changes which means that the costs of meeting US requirements become more of a burden.

Which means that the costs of regulations does not fully explain what's happening to US Financial markets. The result: winding back Sarbanes-Oxley is unlikely to have that big an impact on the health of these markets.

Still, business will like the changes, particularly with Reuters reporting that the deadline for small companies to fully comply with Sarbanes-Oxley could be extended past 2008.