Hong Kong and Singapore have joined London and New York as "global leaders" in the financial centre firmament, while Jersey pipped Guernsey and the Isle of Man for the fiercely-coveted title of Top Offshore Centre, according to the authors of a ranking of world financial centres.
Shenzhen, a Chinese city few westerners have even heard of, leapt all the way up to fifth place from obscurity in the latest Global Financial Centres Index, sponsored by the City of London and compiled twice yearly by London-based Z/Yen Group.
London remained ensconced in its usual place at the top of the ranking, followed by New York, while Hong Kong moved up one place to take the third spot, ahead of Singapore, which slipped to fourth. (See list, below.)
‘Genuine global leaders’
Among the most dramatic movements were the rise in points by Hong Kong and Singapore, which for the first time joined London and New York in receiving more than 700 points each (out of a possible 1,000). Observed the survey’s authors: “We consider that they have now joined London and New York as genuine global leaders.
“London and New York still lead the field, although the gap between the second [New York] and third placed centre has been cut from 81 points…to 45.”
The GFCI index has been compiled for the City of London for the past three years and is based on a combination of statistical data and surveys of financial industry executives.
The biggest losers in the most recent ranking were Glasgow and Gibraltar, both of which slipped 18 places; Oslow, down 17; and Helsinki, down 15.
Beijing leapt 29 places to 22nd, just below Dubai, which rose two notches in spite of its recent troubles, while Shanghai jumped 25 spots to take tenth place, below Geneva – down three – and above Sydney, up five.
‘White list’ versus ‘grey’
The GFCI’s authors noted that there was a “strong correlation” in the offshore centres category between GFCI ratings and OECD status, which in turn is related to these jurisdictions’ willingness to comply with OECD standards on tax information exchange. “Centres such as the Bahamas and Gibraltar, on the OECD ‘grey list’, are well below the ‘white-listed’ centres”, they said in the report.
Jersey came in at 14th, down one place; Guernsey was 15th, down three; the Isle of Man was 25th, down 7; in descending order, the other offshore centres on the GFCI list were Cayman Islands, Bermuda, the British Virgin Islands, the Bahamas and Gibraltar.
The extensive GFCI report contains a breakdown of financial services categories, in of which all but one – banking – London comes out on top. The other four categories are asset management, government and regulatory issues, insurance and professional services.
Of the industry sector breakdown, the survey’s authors note that “there have been several significant improvements in the banking and insurance su-indices for Asian centres”, with Shenzhen a new entry in both the insurance and banking industry sub-indexes.
London versus New York
Commenting on the competition between the top two financial centres, the GFCI survey’s authors say the have “long argued that the relationship between London and New York is mutually supportive, and a gain for one does not mean a loss for the other”.
“Before the crisis, a level of competition between the two centres was very evident.
“While many industry professionals still see a great deal of competition, policymakers appear to recognise that working together on certain elements of regulatory reform is likely to enhance the competitiveness of both centres.”
GFCI 6 (city and score)
1. London (790)
2. New York (774)
3. Hong Kong (729)
4. Singapore (719)
5. Shenzhen (695)
6. Zurich (676)
7. Tokyo (674)
8. Chicago (661)
9. Geneva (660)
10. Shanghai (655)
11. Sydney (651)
12. Frankfurt (649)
13. Toronto (647)
14. Jersey (640)
15. Guernsey (638)
16. Luxembourg (637)
17. San Francisco (634)
18. Boston (634)
19. Paris (630)
20. Washington DC (630)
