In my posts I try to help people make better decisions, and thus I'd frame how you make your personal decisions on where to work, what sector to work in, and what to study based upon what how you estimate your skills will compete in different sorts of markets.Currently there is no real structural difference between London, NY, Chicago, Tokyo, Paris and even Frankfurt. Scale varies of course, and some products are quite local, such as government debt, but if you're good at your job in Paris, you'd be good in NY. That I feel is going to change.My model is a lot of factors few of which I have accurate numbers for.The outcome depends not upon absolute changes but how the changes interact.My assumption is that London will keep to having as little regulation as possible and that Germany & France will go for it big time. Switzerland's elite feels deeply embarassed about what has happened around its banks, so I guess will go the same way. French staff are particularly exposed because they are more involved in the "smarter" stuffe. That is the sector in worst decline, but this may be balanced by the fact that a good education helps in a tough market. Outside Paris they ar more likely to be fired, but more likely to get hired again.So I think on balance French quants will do slightly better than average, just so long as they leave Paris for London, Dubai, SG and HK. From our database we see that many French quants have names that imply N.African origins. They will possibly be the most frequent movers towards Dubai, Kuwait et al.Frankfurt is a marginal player, only kept in the game by the great strength of the German economy. For years it was heaviliy rumoured that Deutsche was going to move HQ to London, but of course that is a lost dream now.Political interference will mean that Frankfurt becomes more focused on local work like corporate finance, debt issues, and local IPOs. Political ownerships will mean that "anglo saxon" style hostile takeovers which always produced such good money for banks will disappear. High regulation will mean a tougher time for quants, even more than bankers in general. France in particular produces far more quants than its local economy could possibly consume, even when times were good.If they can't go to London or NY, that will be very tough for a couple of years since Paris markets will be more regulated and reducing in size. But since French DEA's etc can legally work icross Europe I expect to see them adding to the competition all over. In the short term Paris will be the worst financial centre to seek work. Frankfurt has never really been all that quanty. Many of you will have seen the activities of our new expanded research team, and one effect has been to confirm to me the surprisingly small % of people from Germany or in Germany who do this line of work. The German economy will probably contract less than the British so that endogenous financial activity will keep going, but regulation will mean that quants benefit the least from this. German manufacturing will no doubt absorb some quants who decide to quit finance altogether.So Paris and Frankfurt will contract less but recover slower.Apart from Dublin, I expect the smaller centres to decline a lot. Some may drop below critical mass in various types of financial activity. Dublin I don't see growing in absolute terms, but increasing market share as others shrink faster.However, if one assumes that regulation will follow the models used in aviation and medical products, the amount of testing and checking can be expected to increase big time.Only a small % of a drug companies money goes on looking at new molecules, and rarely do engineers at Boeing get to see if they can build a jet powered seaplane. (The Russians have them just sooo coool).Most work is checking, testing, and checking that the testing is right. Drinking with the CIO of one top tier drug company I was told that their new Lotus Notes document tracking system cost far more than all reseach at the company put together.Paper trails are big things in drugs and aircraft parts since failure is seen as so bad.You see where I'm going here ?Model validation, quantitative risk and provably correct procedures are going to be a larger % of this kind of work.You can do source code control on mathematical models. Yes you can. No really, it is possible, using stuff you can buy today. The reason you don't is that it is sooo painful.It is possible to formally prove that a program exactly implements a given model.I suspect I am the only person in this topic who can do this, it is a very rare skill indeed. Not that hard to learn, just that few of you have learned it, and I expect a good % of readers could learn to do it better than me.I cover some of the basics on the CQF, but there is a lot more to learn.It's shitty tricky stuff though. For instance one must learn that x+1 can equal x, after that it gets really tough. Any one here know de Morgan's law ? That's the trivial end.So heavier regulation will increase the work per unit of output.This is where my 2nd rate economics shows its flaws clearly.It may be the case that the increased regulation means more jobs, OK, not such good jobs, but more jobs nevertheless.Or...It may be that increased costs means that some kinds of "product" simply is not viable to produce at all. That's already the case, has happened in light aviation, and regularly happens in drugs and weapon systems.Or... regulatory arbitrage may mean this stuff moves to places where the manpower costs are lower and the regulators screw with you less.India is thus getting a lot of medical research now, partly because of cost, and partly because Creationists in the US government are "not comfortable" with advanced medical technology.Or...Some locations have made good money out of having tighter regulation because they are trustworthy in times of great trouble.Switzerland has a large % of several areas of finance because it is very protective of the interests of people who put their wealth there.HK & Sg got a lot of the Far Eastern financial markets through having a decent relatively uncorrupt legal system where government cronies rarely got to steal much.With all its flaws, the US legal system doesn't get in the way of banks much.Some countries like Sweden and Switzerland are able to sell premium manufactured good because of perceived high safety standards.Maybe that will happen with banks. Maybe "anglo saxon" banks find it hard to survive in the long term because their looser regulation means that they are not seen as outfits you should trust ?I think that is the less probable path, but it's far from impossible, since a problem with selling yourself on "high ethical standards" is that it is far easier to screw them up. Swiss banks still enjoy a popular image as "trustworthy", which is worth real money to them.After the Iceland screwup, the quality of the government giving a guarantee or doing regulation is certain to be a major issue in large scale decision making.There is no useful answer to be derived from doctrinaire free marketeers, faith based economics, neo socialism, or the medieval protectionism of French politicans. My only reason for believing British politicians will screw up less is that they dare not upset the banks too much. Of course a regulator that is scared of those it is supposed to regulate, carries the downside risk we have all seen...My call is that someone will get it right, more likely London than Frankfurt, but that's not exactly rock solid.Britain has no real alternative but to be nice to bankers, and bonuses are not likely to be screwed with much after the current wave has passed.But German and French politicians have centuries of hostility towards "anglo saxon" money lenders and I expect a combination of regulation and taxation to try and kill the "bonus culture".Hard to see them not succeeding at least in part, which sets the scene for what will happen in the recovery...There are "anglo saxons" all over the world plotting to profit from the huge levels of mispricing that the last year has caused.Their motives are some mix of greed, ambition and wanting to look cool to the people they work with.This will of course be risky, and some will screw up.Would you want to do this if your bonus was capped so that the screwup cost you dear, but you got almost none of the upside ?So people doing this must choose a location, and it ain't gonna be Paris or Frankfurt. Might be London, might be HK, Dubai, Dublin or Sg, more likely some combination.If I were given the job of driving a 3rd tier finance centre to the top tier, I'd spend real money creating a solid regulatory and legal system. Headhunt British judges, French administrators, American lawyers and "anglo saxon" bankers to build a provably sound system. So you have to guess which level of regulation will come out best and which maps to your personal talents and skills and go there.