London still on top

London retains its global lead as the world’s top global financial centre, followed by New York, despite the financial turmoil of the past six  months. Though all financial centres have taken a beating in ratings thanks to the economic crisis, London and New York have emerged as more resilient in the last six months of 2008, compared to centres like Singapore and Hong Kong. 

Mumbai has retained its rank at 49th position, though its ratings has dropped 12 points, a notch behind Johannesburg and one ahead of new entrant Bangkok. Shanghai dropped 1 place to the 35th position. Taipei, at 41, and Kuala Lumpur at 45 are new additions to the list from Asia. 

The six monthly Global Financial Centres Index (GFCI) is compiled by independent think tank Z/Yen Group, from surveys of finance professionals around the world and external competitiveness indicators. This time, respondents rated the quality of the business environment – especially regulation and taxation – as the most important factor for a centre’s competitiveness. 

Key trends that have emerged in this survey, which is dramatically different from the last one, is that there has been a significant drop in confidence across all 62 centres and a higher degree of uncertainty and volatility among respondents worldwide. The top two have shown more resilience than others lower down the league tables. ‘A particular responsibility falls to long established centres, like New York and London, to work with others to help restore a stable global financial services architecture,” said Stuart Fraser, chairman of the City of London Policy and Resources Committee. 

While London lost 10 points and New York 6 in overall ratings, centres in other parts of the world have seen a far steeper loss in confidence. Singapore, Hong Kong and Zurich, ranked 3rd, 4th, and 5th, have seen their ratings drop by over 14 to 17 points. 

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Ian Luder, Lord Mayor of the City of London, which publishes the study, said: “This research confirms that the financial services industry around the world has been seriously damaged by the crisis. Our task now is to climb out of the despair and to restore a sense of proportion and reality.” A surprise entry in the top ten is Dublin at No 10, which has moved up 3 places in rankings.