Bloomberg News
New York Steals London’s Mantle as World’s Top Financial Center
New York replaced London as the world’s leading financial center for the first time, after the City was rocked by a series of scandals and questions over the U.K.’s place in the European Union.
New York holds the top spot in the latest Global Financial Centres Index with a “shaky, statistically insignificant” two-point lead, according to Michael Mainelli, chairman of Z/Yen Group Ltd., which compiles the index. Hong Kong and Singapore, the two leading Asian centers, have narrowed the gap between them and the top two to fewer than 30 points on a scale of 1,000, the index shows.
Scandals including banks abusing their clients by selling unneeded insurance, manipulation of financial benchmarks and trading losses, have combined to damage the City’s reputation for probity, just as plans for a referendum on EU membership cast doubt on the terms of its access to that market. While New York has challenged London for the pedestal since the inception of the index, a seven-point rise in its rating gained it the top spot after the U.K. capital suffered a 10-point decline, the largest of any center in the top 50.
“London needs a reputation that everyone who comes will be treated fairly and can compete fairly,” according to Mainelli. “Without the large domestic economies behind New York and Hong Kong, London needs to act more like a Singaporean city state or have the backing of a European Union domestic economy.”
The index, which is updated every six months and is in its 15th edition, is compiled from replies to an online survey. It also uses external gauges including rankings for specific areas such as telecommunications. The index, which was first published in 2007, takes into account broad areas including the business environment, finance, infrastructure, human capital and reputation.
Sustainable Industry
The U.K. government “is determined to build a banking sector that boosts the economy and supports consumers and businesses,” the Treasury said in a statement. “It is creating a framework that promotes a responsible and sustainable financial services industry, tackling the issues of competition and risk in the banking sector.”
More than 3,000 finance professionals responded to the survey with 25,441 assessments of the various centers in the 24 months to December last year, according to Z/Yen.
To contact the reporter on this story: John Glover in London at johnglover@bloomberg.net
To contact the editors responsible for this story: Shelley Smith at ssmith118@bloomberg.net Robert Valpuesta, Patricia Lui
Saturday, 15 March 2014 22:49
LONDON: New York has knocked London from its position as the world's leading global financial centre after seven years, according to the Global Financial Centres Index compiled by London-based consultancy Z/Yen.
London slipped from the top of the global rankings, scoring 784 against 786 for New York, because a series of own goals had tarnished its reputation, the report said.
"London sees the largest fall in the top 50 centres," said Mark Yeandle, report author and associate director of Z/Yen, in a statement on the group's website.
"This seems to be based on a number of factors including uncertainty over Europe, the perception that London might be becoming less welcoming to foreigners and perceived levels of market manipulation."
Hong Kong and Singapore took third and fourth spots respectively, the same as a year ago, the survey showed. But the gap between the "Big Four" and the chasing pack, led by Zurich, Tokyo and Seoul, was narrowing, it said.
Middle East centres, such as Qatar, Dubai and Riyadh, which took places 26, 29 and 31 respectively, continued to rise in the index, while 23 of the 27 European centres declined in rank.
TheCityUK, a lobby group for British financial and professional services, said London slipping from the top spot should be a wake-up call for Europe's policymakers.
"London is Europe's financial centre and is hugely important to the continent's ability to finance growth and create jobs by attracting global investors," said Chris Cummings, chief executive of TheCityUK.
The Global Financial Centres Index is complied from assessments completed by 3,246 financial services professionals, Z/Yen said.
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