1 October 2007
London retains its lead in Global Financial Centres Index
2
Recent volatility in global financial markets has highlighted
the crucial role financial services play in maintaining the health
and development of the UK and global economies.
The City of London’s Global Financial Centres Index (GFCI) 2
report, released today (Monday), rates the competitiveness of the
world’s top 50 financial centres. The report ranks London and New
York as the only two truly global financial centres, well ahead of
the two Asian centres of Hong Kong (3rd place) and Singapore (4th
place). Zurich is in 5th place; just ahead of Frankfurt.
Since the first edition of the GFCI in March 2007, London has
maintained its slight lead over New York in all five areas of
competitiveness – people, business environment, market access,
infrastructure and general competitiveness.
Regulation and tax continue to be seen as the most important
determinant of a financial centre’s overall competitiveness.
Michael Snyder, Chairman of Policy and Resources at the City of
London Corporation which represents UK financial services, said;
“The UK’s recent 2% cut in corporation tax shows central government
is committed to improving conditions for doing business. This
enhances London’s position against our closest competitor, New
York.”
Transport and infrastructure are flagged alongside skills as
critical indicators of competitiveness. GFCI 2 highlights growing
concerns over London’s crumbling infrastructure, with many survey
respondents pointing out that failure to address overcrowding, high
prices, delays and complexity in the system are already tarnishing
London’s reputation.
Michael Snyder said; “To maintain competitiveness, the UK must
take action now to address our lamentable public transport and
below-par aviation hubs. Crossrail, allowances for two carry-on
bags at Heathrow, more security staff and the resolution of
industrial disputes before they escalate to debilitating strikes
are critical in keeping London at the top of its game in the eyes
of business travellers.”
GFCI 2 shows niche centres such as Zurich and Geneva flexing
their muscle; Geneva (now 7th) has shot up the rankings to step on
the heels of Frankfurt. It is clear that private banking and asset
management continue to thrive in current markets.
The GFCI is designed to track the changing fortunes and
perceptions of financial centres. Performance of Asian markets saw
Hong Kong and Singapore remain the main contenders to attain status
as a global financial centre.
Shanghai (30th), Beijing (39th) and Mumbai (41st) have all lost
ground in the GFCI rankings, although along with Dubai and Moscow
they were named as the top candidates likely to pack a business
punch in the next 2-3 years. Future GFCI reports will pay
particular attention to the fortunes of Beijing and Shanghai,
assessing the ability of the Chinese Government to provide a stable
and competitive regulatory and economic environment.
Other key findings from the research include:
- London now attracts a greater proportion of foreign IPOs than
New York and is contesting New York’s dominance in private equity
and hedge funds (21% of global hedge funds are now managed in
London)
- AIM attracted more listings than all its global rivals combined
last year raising US$29 billion in primary and secondary
listings
- Negative perceptions of the Sarbanes-Oxley impact are
compounded by the propensity to litigation and high brokerage
charges in New York
- Despite high property costs in London (US$20,475 per
workstation annually to NY’s US$14,355 per workstation) occupancy
rates remain strong and there is a higher volume of real estate
transactions in London than anywhere else.
The GFCI research is conducted by the Z/Yen Group Limited for
the City of London Corporation. It uses additional data from
PricewaterhouseCoopers and a survey of the industry to develop an
index of competitiveness for 50 world financial centres, charting
how they rate relative to each other.
The index brings together the results of online surveys
completed by financial services leaders and 54 separate indices of
competitiveness.
Download the report
Ends
Notes to editors
City of London Corporation:
The City of London Corporation is committed to maintaining and
enhancing the status of the wealth and tax-generating business of
the City as the world's leading international financial and
business centre through its policies and services. Examples are the
extensive overseas business missions headed by the Lord Mayor on
behalf of UK-based financial services and the wide-ranging economic
development, research and regeneration effort the City of London
Corporation undertakes across London. It also runs the City Office
in Brussels on behalf of the City and City Representations in
Beijing, Shenzhen and Shanghai – and a City Office in Mumbai.
Although the City of London Corporation provides local government
services for the City, the financial and commercial heart of
Britain, its responsibilities also extend far beyond the City
boundaries and include management of the Barbican Centre, Central
Criminal Court at the Old Bailey, Epping Forest, Hampstead Heath,
three wholesale food markets, as well as acting as the London Port
Health Authority – and running the Animal Reception Centre at
Heathrow.
Press enquiries: Cubby Fox +44 20 7332 3451.