The seventh Global Financial Centres report (GFCI) also said that although the scores given by those surveyed to the main offshore financial centres “have generally risen” since the last survey was conducted, they did not do so “by as much as those of many other centres, while their rankings have, with the exception of the Isle of Man, declined”. (See chart, below.)
75 financial centres are included in the survey, with the bottom three being Athens, Istanbul and Reykjavik.
Hong Kong, Singapore and Tokyo were in third, fourth and fifth place respectively. The rest of the top ten, in descending order, were Chicago, Zurich, Geneva and Shenzhen and Sydney tied in ninth place.
The slide by London was described by the report’s authors, London-based consultancy Z/Yen, as reflecting the concerns of those it interviewed relating to the quality of London’s business environment, its access to skilled people and its infrastructure.
‘Cannot be complacent’
“We cannot be complacent about this,” Stuart Fraser, policy chairman for the City of London Corporation, notes in an introduction to the report, which has been compiled since 2007 for the corporation. The City of London Corporation provides local government services for London’s financial district as well as looking after certain other entities outside it, including five bridges.
“Evidence from other commissioned research is that the comparative tax and regulation ‘offer’ of London as the leading global financial centre in Europe needs to be carefully considered by policymakers in the UK and the EU.
“Proposed measures to address fiscal deficits and to put in place new frameworks for regulation and supervision of financial services need to be transparent and commensurate with the objectives sought.
There are important questions for us to explore with policymakers to ensure that a progressive reduction in fiscal deficits retains the confidence in the UK economy as a competitive location for an international financial services sector that last year contributed £60bn in taxes, 12% of the total UK tax take.”
This GFCI is the last to be funded by the City of London. However, a spokesman for Z/Yen said the organisation is "currently in discussions with a few interested parties about future sponsorship".
Other key findings in the Global Financial Centres report, which is based on external indices and online surveys of business executives taken between July and December of 2009:
- New York, London, Dubai, Reykjavik and the Cayman Islands were rated "the five centres believed to be suffering the most" from the financial crisis. Said the authors: "New York and London…received substantially more mentions than any other centre."
- Asked to name the "most significant risks to competitiveness posed by the financial crisis", those interviewed cited "regulatory ‘kneejerk’/backlash" as the biggest concern, followed by credit risk for financial institutions, and then recession/inflation.
- Hong Kong and Singapore still lead the Asian financial centres, "but there is continuing uncertainty about secondary Asian centres". Shenzhen, which rose to fifth place on the index when it last came out in September, fell back to tie for ninth place with Sydney, and Shanghai fell one place to eleventh. Tokyo rose two places to fifth, however, and Seoul climbed seven places to tie for 28th with Edinburgh and the Cayman Islands.
- In spite of its recent trouble, Dubai fell only three places in the table to tie at 24th with the Isle of Man. The Cayman Islands fell two places, while Reykjavik, home to the Icelandic banks that collapsed in 2008, stayed unchanged in 75th place, though its rating rose 32 points.
- New York has overtaken London in three key categories in which the British capital previously was tops: business environment, people and infrastructure.
Rate change since GFCI 6
Rank change since GFCI 6
|Guernsey||22||– 6||– 7|
|Isle of Man||tied 24||+ 9||no change|
|Dubai||tied 24||+ 1||– 3|
|Cayman Is||tied 28||+ 7||– 2|
|British Virgin Islands||37||+12||– 3|
|Gibraltar||53||+ 25||– 2|
|Malta||56||+ 22||– 4|
|Bahamas||59||+ 6||– 11|