London has notched up another win in the see saw contest with New York to be the world’s leading financial centre. The latest edition of the Global Financial Centres Index, a research project that reports twice a year, places the capital just ahead of its American rival.
But it’s a close contest, as it has been since the index, created by financial research organisation Long Finance, was first published in March 2007. London comes out on top as greater confidence returns following uncertainties created by the Scotland independence referendum and the general election.
The index is based on a survey questionnaire of 3,200 financial sector professionals plus data from the UN, World Bank and the World Economic Forum. It is scored out of 1,000 and London won by just 8 points.
The assessment is split into 5 categories: business environment, financial sector development, infrastructure, human capital, and reputational and general factors. London came top in each category after losing to New York in 3 of them last time.
After London and New York the top 5 is completed by Asian cities – Hong Kong, Singapore and Tokyo, with Seoul in 6th place. Zurich is the only other European financial centres in the top 10, which is completed by North American cities.
Geneva, Frankfurt and Luxembourg make the top 20 but Paris only manages 37th place. Sydney ranks at 15 with Dubai a place below.
In building the index, assessments are only included from people from outside each centre to avoid any home preference. Respondents from North American and the Middle East are most positive about London, while those from Latin America, Asia/Pacific and Western Europe view it less favourably.
Analysis of the data split into industry sectors shows London comes top with respondents in investment management, banking, government and regulation, and professional services. It is only beaten by New York for those in the insurance sector.
The data also reveals that bigger companies favour New York, just, but those with fewer than 2000 employees rate London more highly.
The longer-term trends in the index show that the dominance of Western Europe and North America is being eroded as Asia/Pacific grows, particularly through the rise of China.
Stability has been key to the success of leading financial centres and the researchers point out that the strongest ones are successful, cosmopolitan cities in their own right.