By Huw Jones
LONDON – New York has extended its lead among the world’s top financial centres, with runner up London losing ground to increasingly competitive rivals in the United States and Asia, the Global Financial Centres Index (GFCI) showed on Thursday.
The index from think tank Z/Yen Group in partnership with the China Development Institute showed the U.S. financial capital holding the top spot with 759 points, down 3 points from six months ago.
Rankings are based on surveys and 150 factors, with quantitative measures from the World Bank, The Economist Intelligence Unit, the OECD and United Nations.
London held on to second place despite shedding 14 points to 726. A similar fall next time would put it behind Hong Kong, Shanghai and Los Angeles, and on par with Singapore, based on their current performances (see table).
London is now the only European centre in the top 10 after Shenzhen replaced Paris in 10th place.
GFCI said Russia’s invasion of Ukraine would affect future rankings for Moscow and St Petersburg, which are likely to fall after coming in at 50th and 110th, respectively, this time.
Graphic: GFCI index for March 2022: https://fingfx.thomsonreuters.com/gfx/mkt/jnpwekyaxpw/GFCI%20rankings%20March%202022.PNG
London’s ranking has become closely watched since Britain’s departure from the European Union, which largely cut off the UK financial sector from the bloc.
In GFCI‘s index of fintech ratings, a sector Britain is prioritising in its push to keep London attractive, New York and Shanghai retained first and second positions respectively, while Beijing and San Francisco overtook London to take third and fourth places.
Brexit led to calls from banks for Britain to bolster the capital’s competitiveness, with listing rules already eased.
The UK finance ministry plans to give regulators a formal competitiveness remit, though keeping banks safe, consumers protected and markets orderly would remain their top priority.
“A primary objective to promote competitiveness is genuinely a bad idea,” Bank of England Deputy Governor Sam Woods said this week.