Global Financial Centres: March 2010

March 2010
en
GLOBAL
FINANCIAL
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GLOBAL
FINANCIAL
CENTRES 7
Global Financial Centres
Foreword
Stuart Fraser
Chairman, Policy and Resources Committee, City of London
This is the seventh biannual Global issues forward by examining them in

Financial Centres report, commissioned greater depth.
and published by the City of London from
Z/Yen Group Ltd since March 2007. It has It is important to note that responses for
again taken the pulse and assessed the the current GFC report relate to the
changing perspectives of market period to end 2009, a time of great
practitioners and regulators on what volatility for the global economy as it
attracts them to locate in different began to emerge from deep recession. It
international financial centres across the is not surprising therefore to see the
world. This report also adopts a new improvement in respondents’ optimism
approach to profiling different types of compared with the views of respondents
centres along new dimensions of six months and particularly one year
competitiveness that reflect how well- before. Their optimism is still muted by the
connected they are in the global prospect of the challenges to be faced
financial architecture, and how over the next few years in reaction to the
diversified their financial services are. financial crisis and any reading of relative
rankings needs to take account of a very
The reports provide a valuable basis for large uncertainty factor.
new work to be commissioned by the City
of London to look more deeply at the That said, the top-ranking centres have
factors driving the connectedness of shown a much greater degree of stability
established and emerging global in their perceived competitiveness to
financial centres. practitioners and are responding more
robustly to the economic recovery.
Our job is to establish evidence for Respondents have assessed the two
policies that will lead the City forward leading global centres of London and
and we will be building on the valuable New York as level on ratings for the first
insights that this area of research has time – a fact which bears out our view
given us so far to look much more closely that these two are the ‘twin sister-cities of
in future at the details of the competitive world finance’. The evidence of the
and cooperative factors. survey points to the continued high
ratings for these two leading global
What exactly affects the success of centres and reflects the multi-facetted
established and rapidly emerging major nature of their competitive advantage.
financial centres is a key question for They both have rich institutional and
London and the wider UK-based financial communication linkages across the
services industry and we are especially world. Respondents continue to believe
interested in how the leading centres will that these two leading centres benefit
respond to the new challenges - for from good levels of mutual co-operation -
example the growing importance of Asia and as Chairman of Policy I see this in our
and the changes in international good working relationships with New York.
supervision designed to minimise the
effect of future crises. Whilst this will There are particular challenges for us to
therefore be the last GFC report that we address this year and they are illuminated
publish, we will be shortly announcing a by this latest report. For the first time in
new research programme that takes the four years, London has had more
1
questions raised by respondents in The research underpinning the GFC

relation to the quality of its business reports has provided a unique record of
environment, its access to skilled people practitioner perspectives through the
and its infrastructure, than have been global boom and the finance-led
raised for New York. We cannot be economic crisis. Z/Yen have monitored
complacent about this. Evidence from the perspectives of practitioners across
other commissioned research is that the the globe as the effects of unsustainable
comparative tax and regulation ‘offer’ of global capital-imbalances and the
London as the leading global financial pursuit of risk taking by many, if not all,
centre in Europe needs to be carefully global integrated investment banks led
considered by policymakers in the UK to a reliance on sophisticated products
and in the EU. Proposed measures to designed to distribute risk that turned out
address fiscal deficits and to put in place in the end to have mediated systemic
new frameworks for regulation and financial collapse.
supervision of financial services need to
be transparent and commensurate with We have seen concerted central bank
the objectives sought. There are interventions and government stimulus
important questions for us to explore with programmes of unprecedented scale.
policymakers to ensure that a progressive Their success in preventing a plunge into
reduction in fiscal deficits retains the economic depression is a testament to
confidence in the UK economy as a the importance of international
competitive location for an international institutions and of intergovernmental
financial services sector that last year cooperation. There is an equal challenge
contributed £60billion in taxes, 12% of the for the recovery phase. To resist those
total UK tax take. protectionist sentiments that would make
the problem of global recovery much
Retaining a fair, consistent and worse, we need to see an established
predictable tax policy and supervisory improvement in the economies of Europe
environment is critical to retaining and the US to meet the stronger recovery
London’s role as a global centre for a in Asia. We need to secure trust in the
large range of financial services and this operation of financial institutions, and
also requires our retaining open markets establish the appropriate taxation,
for the UK and our encouraging them regulation and supervision to both
globally. It is significant in this connection encourage recovery and to protect
that Hong Kong and Singapore retain against future crises.
their ratings as the leading financial
centres in Asia in the current report, but Stuart Fraser
that there is continuing uncertainty about London
second-tier Asian centres. March 2010
2
Background
The City of London’s Global Financial This report - Global Financial Centres 7
Centres Index (GFCI) was first produced by (GFC 7) - builds on the approach adopted
the Z/Yen Group in March 2007, to examine in GFCI 6, with its increased emphasis on
the major financial centres globally in terms the inter-connectedness of centres, to allow
of competitiveness, using a set of ratings a more in-depth examination of the
and rankings. The GFCI has subsequently underpinnings of competitiveness. Whilst the
been updated every six months and the ratings element is retained, there is a new
increase in the number of respondents and approach to profiling major centres in terms
additional data in successive editions has of their linkages within the global financial
enabled us to highlight the changing architecture and the extent and quality of
priorities and concerns of finance the services that they offer. This combined
professionals across a period of great approach is reflected in the change of
economic instability. name to ‘Global Financial Centres’.
Introduction
The GFC approach provides profiles, rate those centres with which they are
ratings and rankings for 75 financial familiar and to answer a number of
centres, drawing on two separate sources questions relating to their perceptions of
of data – instrumental factors (external competitiveness. Since GFCI 6, a total of
indices) and responses to an online survey. 507 new respondents have filled in the
questionnaire, providing 7,161 new
■ Instrumental factors: Previous research assessments from financial services
indicates that there are many factors respondents globally across the period
that combine to make a financial centre July 2009 to December 2009. Overall,
competitive. These can be grouped into 32,170 financial centre assessments from
five over-arching ‘areas of 1,690 financial services professionals
competitiveness’ – People, Business were used to compute GFC 7, with older
Environment, Infrastructure, assessments discounted according to
Market Access and General age.
Competitiveness. Evidence of a centre’s
performance in these areas is drawn Full details of the methodology
from a range of external measures. For behind GFC 7 can be found at
example, evidence about a fair and just www.cityoflondon.gov.uk/gfci. The ratings
business environment is drawn from a and rankings are, as previously, calculated
corruption perception index and an using a ‘factor assessment model’, which
opacity index. Sixty-four factors have combines the instrumental factors and
been used in GFC 7, of which 24 have questionnaire assessments. The full list of
been updated since GFCI 6. the 75 financial centres rated and profiled
in GFC 7 is shown on page 28.
■ Financial centre assessments: These are
provided by responses to an ongoing The ratings and rankings approach has
online questionnaire completed by been used to track financial services
international financial services competitiveness over time, both in terms
professionals. Respondents are asked to of individual centres’ performance, and
3
the wider issues of concern to deemed to be ‘Global’. If the ratings Table 1

professionals in the field. In the light of the were over 50%, this centre was deemed Financial Centre
recent economic turmoil globally, the to be ‘Transnational’. Profiles
extensive data collected over the last
three years allows for a deeper analysis of ■ ‘Diversity’– the breadth of industry
the aspects that make centres sectors that flourish in a financial centre.
competitive in different markets, from We consider this ‘richness’ of the business
global leaders to local specialists. environment to be similar to biodiversity
and use a combination of biodiversity
The data now held includes over 51,000 indices (calculated on the 64 instrumental
assessments from more than 3,000 factors for each centre) to measure this.
respondents. The dataset used to model A high score on this measure means that
GFC 7 includes over 8.5 million data- a centre is well diversified; conversely a
points. low score reflects a less rich financial
services diversity.
This allows us to create financial centre
profiles. Generating a taxonomy is often ■ ‘Speciality’– the quality and depth of
likely to be a difficult and contentious certain industry sectors in a centre, such
endeavour. There are many alternative as asset management, investment
methods and many possible ways of banking and insurance. A centre’s
defining different profiles of financial performance on this dimension is
centres. The key requirement here was to calculated from the difference between
base the profiling on hard data from the the GFCI rating and the industry sector
research rather than introduce our own ratings. If a centre is well above its overall
subjective opinions. GFCI rating in the industry sectors, it is
profiled as a specialist.
Starting with clustering and correlation
analysis of the different factors we have Here, ‘Diversity’ (Breadth) and ‘Speciality’
identified three key measures (axes) that (Depth) are combined on one axis to
determine a financial centre’s profile create a two dimensional table of
along different dimensions of financial centre profiles. The 75 centres
competitiveness: are each assigned to a profile on the basis
of a set of rules for the three measures:
■ ‘Connectivity’ – this represents how well how well connected a centre is, how
known a centre is around the world and broad its services are, and how
how connected it is to other financial specialised it is. The rating for each centre
centres. The measure draws on the and the range for each profile category
questionnaire data, whereby are given in brackets for reference.
respondents are asked to assess only
those centres with which they are This profile ‘map’ shows the eight ‘Global
personally familiar. A centre’s Leaders’ (in the top left of the table)
connectivity is assessed using a which have both broad and deep
combination of ‘inbound’ assessment financial services activities and are
locations (the number of locations from connected with many other financial
which a particular centre receives centres. This list includes London, New
assessments) and ‘outbound’ assessment York, Hong Kong and Singapore, centres
locations (the number of other centres that have been identified as the leading
which respondents from a particular global financial centres in previous
centre assess). A 2/3 weighting was given editions of the GFCI. Paris and San
to inbound assessments. If the weighted Francisco are ‘Global Diversified’ centres
ratings for a centre were provided by as they are equally well connected but
over 75% of other centres, the centre was do not exhibit the same depth in different
4
Broad & Deep Relatively Broad Relatively Deep Emerging
Global Leaders Global Diversified Global Specialists Global Contenders

GFC 7 Range: GFC 7 Range: GFC 7 Range: GFC 7 Range:
775 - 660 651 - 642 671 - 643 668 - 516
Global
Chicago (678) Paris (642) Geneva (671) Beijing (651)

Frankfurt (660) San Francisco (651) Luxembourg (643) Dubai (618)
Hong Kong (739) Moscow (516)
London (775) Shanghai (668)
New York (775)
Singapore (733)
Toronto (667)
Zurich (677)
Established Transnational Transnational Transnational

Established Transnational Transnational Transnational
Transnational Diversified Specialists Contenders
GFC 7 Range: GFC 7 Range: GFC 7 Range: GFC 7 Range:
692 - 595 617 - 579 670 - 568 571 - 549
Transnational
Boston (652) Amsterdam (604) Bahrain (587) Bangkok (549)

Edinburgh (615) Copenhagen (587) British Virgin Islands (596) Kuala Lumpur (571)
Melbourne (617) Dublin (612) Cayman Islands (615) Mumbai (562)
Stockholm (595) Madrid (581) Gibraltar (568)
Sydney (670) Milan (579) Guernsey (632)
Tokyo (692) Montreal (617) Hamilton (612)
Vancouver (623) Munich (610) Isle of Man (618)
Seoul (615) Jersey (643)
Vienna (583) Shenzhen (670)
Taipei (638)
Established Local Diversified Local Nodes Evolving Centres

Players GFC 7 Range: GFC 7 Range: GFC 7 Range:
GFC 7 Range: 606 - 480 600 - 535 574 - 447
647 - 566
Athens (480) Bahamas (557) Budapest (481)
Johannesburg (566) Brussels (591) Buenos Aires (535) Glasgow (570)
Local
Washington D.C. (647) Helsinki (573) Jakarta (535) Istanbul (470)

Lisbon (529) Malta (565) Prague (543)
Mexico City (563) Manila (527) Reykjavik (447)
Osaka (606) Mauritius (552) Riyadh (507)
Oslo (581) Monaco (578) Rome (574)
Sao Paulo (590) Qatar (600) St. Petersburg (501)
Warsaw (520) Rio de Janeiro (566) Tallinn (488)
Wellington (582
5
activities to be considered ‘Global

Leaders’. Similarly, Geneva and
Luxembourg are ‘Global Specialists’
(specialising primarily in Asset
Management) but do not have
sufficiently broad ranges of financial
services activities to be ‘Global Leaders’.
The four ‘Global Contenders’ of Beijing,
Dubai, Moscow and Shanghai are
profiled as global because there is
widespread awareness of their activities,
but their financial services are not
currently sufficiently broad and deep to
be considered leaders. Chart 1 shows the
profiles mapped against the GFC 7
ranges.
The profiles shown in Table 1 are used

in our geographical analyses later in
this report.
Chart 1
Financial
GFCI7 Rating >
800
Centre Profiles
Mapped 750
against GFC 7
Ranges 700
650
600
550
500
450
400
es
s
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Ranges >
6
The Main Headlines of GFC 7
The full set of GFC 7 ratings and rankings GFC 7 shows that of the 75 centres rated,
are shown in Table 11. We believe that 71 centres have received higher ratings
the financial centre profiles are a very and only four have seen decreases in
important addition to the GFC 7 report. their ratings. GFCI 5 demonstrated that
However, the changes in individual the financial crisis had created
centre ratings remain important and uncertainty and a significant reduction in
allow us to identify certain headline confidence, with an unprecedented fall
changes: in the ratings for every centre. There was
■ Greater confidence amongst financial also a ‘flight to safety’ with the ratings of
services professionals, shown by a rise in the top centres falling less than those of
assessments; the bottom centres. GFCI 6 saw a rise in
■ London and New York are now level in many ratings potentially demonstrating
the ratings for the first time. Respondents the start of a return in confidence. This
continue to believe that these centres seventh report confirms that respondents
exhibit good levels of co-operation; to the online survey are more confident
■ London has dropped 15 points in the about the future of financial services than
ratings, from 790 to 775 points - the they have been for over a year.
second largest drop in scores. New York
has overtaken London in three of the sub- Chart 2 demonstrates this particularly well
indices: Business Environment, People – the three month average assessments
and Infrastructure; of the top centres are now at the highest
■ Hong Kong and Singapore still lead in levels since GFCI started:
Asia but there is continuing uncertainty
about secondary Asian centres.
Chart 2
Average Assessments >
800
3 Month Moving
Average
Assessments for 750
the Top 25
Centres
700
650
600
550
500
May-08
Jan-09
Jun-09
Dec-08
May-09
Apr-09
Dec-09
Dec-07
Feb-08
Oct-08
Nov-07
Jul-08
Aug-09
Apr-08
Sep-08
Feb-09
Oct-07
Nov-08
Jul-07
Mar-08
Aug-08
Sep-09
Sep-07
Mar-09
Jan-08
Jun-08
Jul-09
Nov-09
Aug-07
Oct-09
GFCI3 GFCI4 GFCI5 GFCI6 GFC7
Date >
7
GFC 7 shows a general rise in ratings but For the first time in the GFCI, London and
this rise is variable, with the change in New York are equal first, both with
ratings varying from minus 25 points 775 points on a scale of 1 to 1,000, as a
(Shenzhen) to plus 64 (Warsaw), with an result of London’s score falling 15 points.
average movement of plus 23 points. The The gap between the two centres has
largest rises in ratings were achieved consistently been narrow, ranging from
mainly by the centres at the lower end of 5 to 19 points over the previous six editions
the index with Warsaw, Moscow, Lisbon of GFCI, and Chart 3 demonstrates their
and Budapest all seeing rises in excess of recent convergence.
50 points, to regain lost ground, with
drops in score of 53, 58, 30 and 80 points
respectively over the last two editions
of GFCI.
Chart 3
Top Four
GFCI rating >
830
Centres GFCI
810
Ratings Over
Time
790
London
770 New York
750
Hong Kong
730 Singapore
710
690
670
650
GFCI 1 GFCI 2 GFCI 3 GFCI 4 GFCI 5 GFCI 6 GFC 7
Date >
Chart 3 shows that London and New York concern of respondents in all the
still lead the field although the gap leading centres.
between them and the third placed
centre has been steadily cut from We have long argued that the
81 points a year ago and 45 points six relationship between London and New
months ago to just 36 points now. The York is mutually supportive and a gain
main concerns voiced about London’s for one does not mean a loss for the
competitiveness are the fear of a other. Whilst many industry professionals
regulatory backlash that limits the still see a great deal of competition,
freedom of financial institutions and the policymakers appear to recognise that
levels of corporate and personal working together on certain elements of
taxation that may drive high earners regulatory reform is likely to enhance the
abroad. New regulatory arrangements competitiveness of both centres.
are also a concern in New York, and the Finance professionals, however,
loss of skilled personnel to the industry is a believe that common regulation
8
between North America and Europe will

be extremely difficult to negotiate.
The GFCI questionnaire asks respondents

which financial centres they believe are
suffering most as a result of the current
financial crisis. New York and London
head the list, receiving substantially more
mentions than any other centre:
Table 2
The Five Centres Financial Centre Number of Mentions since GFCI 6
Believed to be
Suffering Most New York 110
from the Crisis London 89
Dubai 51
Reykjavik 37
Cayman Islands 29
This finding backs up the GFCI ratings. mentions of New York while Singapore
Respondents generally feel that the two received fewer than 10 mentions overall.
long-established global centres have
been impacted on the most by the Related to this, the GFCI questionnaire
economic crisis. This is reflected in GFC 7; also asks what the most significant risks to
London has fallen by 15 points in the competitiveness posed by the financial
ratings and although New York has seen a crisis are. The most commonly identified
rating increase of 1 point, this is against risks are shown in Table 3:
an average increase of 23 points. Hong
Kong received fewer than 20% of the
Table 3
The Five Centres Risk Number of Mentions since GFCI 6
Believed to be
Suffering Most Regulatory ‘Kneejerk’ / Backlash 42
from the Crisis Credit Risk for Financial Institutions 29
Recession / Inflation 21
Increased Taxation 19
Unemployment / Loss of Skills & Experience 15
9
The fear of regulatory overload leads the

field here and is backed up by responses
to a further question in the GFCI
questionnaire about the most important
factors of competitiveness. The number
of times that each area is mentioned is
summarised in Table 4:
Table 4
Main Areas of Area of Competitiveness Number of mentions Main concerns raised
Competitiveness by respondents
Business Environment 67 Regulation, taxation and

ease of doing business
People 44 Quality and availability of staff,
labour market flexibility
Infrastructure 22 Business infrastructure
General Competitiveness 21 General economic factors,
fear of recession
Market Access 15 Dilution of clustering of professionals
and institutions
Clearly the Business Environment is developments seen in GFCI 6. Hong Kong

viewed as a key area - it is actually continues to thrive and has risen by
mentioned in responses more often than 10 points since GFCI 6, maintaining its
the next two areas, People and position in 3rd place just ahead of
Infrastructure, combined. This is a Singapore. Hong Kong and Singapore
reflection of the regulatory reaction to continue to be firmly established as the
the financial crisis but also reflects leading Asian centres. Tokyo, which, with
concerns over taxation. One of the the exception of GFCI 5, has always
themes that emerges from the responses appeared in the top ten, has risen two
is the need for predictability and stability places to 5th, and is the 3rd highest
of regulation. ranked Asian centre. There is some
variability, however, about other Asian
One effect of London’s relative decline in centres. GFCI 6 saw Shenzhen appear in
competitiveness is that other leading the top 5 but GFC 7 sees it falling to 9th
European financial centres are catching place and showing the largest drop in
up with London. Frankfurt was 141 points points in the survey. Shanghai has fallen
behind London six months ago and is now one place to 11th although gaining
115 behind while Zurich was 114 points 13 points, whilst Beijing and Seoul make
behind and is now just 98 below London. considerable progress up the ranking
Similarly, London’s lead over Paris and to 15th and 28th respectively, both
Geneva is less significant than it was six showing substantial gains in points. It is
months ago in GFCI 6. important therefore to pay attention to
both the short term performance of these
Another story to emerge from GFC 7 is the centres and their performance over the
continuing development of the Asian longer term.
financial centres. Overall the rise in scores
of the Asian centres has continued,
although it is not as dramatic as the
10
European Financial Centres
European financial centres have had

mixed fortunes since GFCI 6. Table 5
shows the top 15 European financial
centres, all of which have increased their
ratings since GFCI 6 with the exception of
London (-15) and Dublin (-1):
Table 5
Top 15 Centre GFC 7 Rating GFC 7 Rank Change in Rating Change in Rank
European since GFCI 6 since GFCI 6
Centres London 775 1 -15 0
Zurich 677 7 1 -1
Geneva 671 8 11 1
Frankfurt 660 13 11 -1
Luxembourg 643 19 6 -3
Paris 642 20 12 -1
Edinburgh 615 29 10 -2
Dublin 612 31 -1 -9
Munich 610 33 22 -3
Amsterdam 604 35 18 -4
Stockholm 595 38 26 -2
Brussels 591 39 23 -2
Copenhagen 587 =41 27 0
Vienna 583 43 28 3
Madrid 581 =45 21 -5
Zurich has slipped one place in the types of financial services institutions.
rankings and Geneva has gained one Geneva and Luxembourg, whilst being
place; both remain in the top ten. Both well connected, are seen to be high
centres remain strong in asset quality specialists in the field of Asset
management and private banking and Management, rather than offering a fully
receive strong support from respondents diversified service, and are hence
in the offshore centres and from London. profiled as ‘Global Specialists’. Paris is a
Global Centre and has very strong
All the major European centres display a international connections. It does not,
good degree of consistency across the however, exhibit sufficient depth in
industry sub-indices and the area of financial services to be considered a
competitiveness sub-indices. London is Global Leader; we profile it as a Global
the leading financial centre in Europe but Diversified Centre. Moscow is a ‘Global
Frankfurt, Zurich and Paris also perform Contender’, exhibiting strong
well in all areas – Zurich for example international connections and many
averages 8th place across all sector respondents (especially from Asia) have
sub-indices with Frankfurt not far behind knowledge of the centre. Moscow does
(further details of the sub-indices are not yet have sufficient depth or breadth
shown on page 30). as a financial centre to be considered a
specialist or diversified centre:
From a profiling perspective, London,
Zurich and Frankfurt are seen as ‘Global
Leaders’. They are well known globally,
and have a rich environment of different
11
Chart 4
Profile of European Centres
Global Global Leaders Global Diversified Global Specialists Global Contenders

Frankfurt Paris Geneva Moscow
London Luxembourg
Zurich
Transnational Established Transnational Transnational Transnational

Edinburgh Amsterdam – –
Stockholm Copenhagen
Dublin
Madrid
Milan
Munich
Seoul
Vienna
Local Established Players Local Diversified Local Nodes Evolving Centres

– Athens Monaco Budapest
Brussels Glasgow
Helsinki Istanbul
Lisbon Prague
Warsaw Reykjavik
Rome
St. Petersburg
Tallinn
The remaining centres in the European assessments given to a centre by

top 15 are classed as either Established or people based there are excluded from
Diversified Transnational centres. The one the GFC 7 model to eliminate ‘home
exception to this being Brussels which is preference’.
categorised as a ‘Local Diversified’
financial centre due to its lower In the following charts, the difference
connectivity rating that the other leaders between overall mean assessments
such as Zurich, Geneva, Frankfurt and by region is shown. The additional
Paris, although it is close to the boundary vertical line shows the mean if all
between Local and Transnational. assessments from the whole of the home
region are removed.
Examining the assessments given to each
major centre is a useful means of
assessing the relative strength and
weakness of their reputations in different
regions. It is important to note that
12
Chart 5
Location >
Assessments
Asia 29%
by Region –
Difference from Europe 34%
the Mean –
North America 8%
London
Offshore 29%
-200 -150 -100 -50 0 50 100
Mean without region
Average Assessment – Difference from Mean >
London’s overall average assessment

was 807. The chart on London indicates
that London is well regarded in Europe
but less well rated than average by the
offshore centres; North American and
Asian respondents are fairly close to
the mean.
Chart 6
Location >
Assessments
Asia 25%
by Region –
the Mean –
North America 8%
Zurich
Offshore 30%
-200 -150 -100 -50 0 50 100
Mean without region
Zurich’s overall average assessment was

704. Zurich’s assessments show a more
pronounced pattern than London with
the Asian based respondents, who have
a more negative perception of Zurich.
European and North American
respondents are positive against
the mean.
13
Chart 7
Location >
Assessments
Asia 36%
by Region –
the Mean –
North America 7%
Frankfurt
Offshore 12%
-200 -150 -100 -50 0 50 100
Mean without region
Frankfurt’s overall average assessment

was 679. In a similar pattern to London,
Frankfurt is given lower assessments
by people based in offshore locations
than elsewhere.
14
North American Financial Centres
The North American Centres have all

performed reasonably well in GFC 7 and
all have increased their ratings from
GFCI 6. As reported, New York has been
impacted on the most by the financial
crisis and has only risen by one point,
while the Canadian centres have
seen a greater increase in scores than
the US centres:
Table 6
Top North Centre GFC 7 Rating GFC 7 Rank Change in Rating Change in Rank
American since GFCI 6 since GFCI 6
Centres in GFC 7 New York 775 1 1 1
Chicago 678 6 17 2
Toronto 667 12 20 1
Boston 652 14 18 3
San Francisco 651 16 17 2
Washington D.C. 647 17 17 3
Vancouver 623 23 34 6
Montreal 617 26 31 6
Chicago retains its position in the GFC 7 New York, Chicago and Toronto all fit the
top ten and remains the 2nd North profile of Global Leaders – they are well
American financial centre, after New diversified, well connected and have
York. Chicago is not just strong in strength across the sectors. San Francisco
derivatives trading, for which it is is profiled here as a Global Diversified
probably best known, but is a real Centre – it is well connected and serves a
‘all-rounder’: it is strong in all areas, and diversified industry but does not as yet
in the top ten in all industry and area of show sufficient depth in enough sectors
competitiveness sub-indices. Chicago is to be classified as a Global Leader.
rated highly by respondents based
in New York but, surprisingly, very few
other respondents in North America
assessed Chicago.
Toronto has risen 20 points in the GFC 7

ratings. It is the 3rd North American
financial centre and the clear leader in
Canada. Toronto performs well in the
People sub-index, where it is in 6th place,
and in the Asset Management and
Professional Services sub-indices,
where it is 9th place in both categories.
Calgary was recently added as a new
financial centre to our online survey –
it did not receive sufficient ratings to be
included here.
15
Chart 8
Profile of North American Centres

Chicago San Francisco – –
New York
Toronto

Boston Montreal – –
Vancouver

Washington D.C. – – –
Boston and Vancouver have both a broad not from London, Europe or New York.
and deep presence in financial services but
are less well-connected with other centres The difference between regional
around the world – they are ‘Established assessments is again examined here for
Transnational’ centres. Montreal is not yet some of the major centres, to see in which
deeply enough involved in some industry regions centres are most favourably
sectors to be an ‘Established Transnational’ regarded.
centre. Washington is, perhaps surprisingly,
an ‘Established Player’; on the measures of The overall average assessment for New
connectivity used for profiling, Washington York is 804. New York benefits from strong
is seen to be more of a local player than an North American support but the offshore
international one, receiving support from centres assess the city less positively.
some parts of North America (and Asia) but Europeans are close to the overall mean.
Chart 9
Location >
Assessments
Asia 35%
by Region –
the Mean –
North America 11%
New York
Offshore 19%
-200 -150 -100 -50 0 50 100
Mean without region
16
Chart 10
Location >
Assessments
Asia 44%
by Region –
the Mean –
North America 13%
Chicago
Offshore 9%
-200 -150 -100 -50 0 50 100
Mean without region
Chicago has an overall average North American respondents assessed

assessment of 698. Chicago shows a Chicago. A high level of response
similar pattern to New York with regard to from Asian respondents is notable
the Offshore and North American although the assessments given were
assessments, the former being lower than lower than average.
average, and the latter higher. Chicago
is rated highly by respondents based in
New York but surprisingly very few other
Chart 11
Location >
Assessments
Asia 39%
by Region –
the Mean –
North America 18%
Toronto
Offshore 16%
-200 -150 -100 -50 0 50 100
Mean without region
Toronto is the only North American

centre to receive a higher than average
score from the offshore centres; it is also
well regarded by respondents based
in London, although less so by the rest
of Europe.
17
Asian Financial Centres
With the exception of Shenzhen, all Asian

centres have shown an improvement in
the GFC 7 ratings, which for many comes
on top of a substantial increase in scores
in GFCI 6.
Table 7
Asian Centres Centre GFC 7 Rating GFC 7 Rank Change in Rating Change in Rank
in GFC 7 since GFCI 6 since GFCI 6
Hong Kong 739 3 10 0

Singapore 733 4 14 0
Tokyo 692 5 18 2
Shenzhen 670 =9 -25 -4
Shanghai 668 11 13 -1
Beijing 651 =15 38 8
Taipei 638 21 29 4
Dubai 618 =24 1 -3
Seoul 615 =28 39 7
Osaka 606 34 41 4
Qatar 600 36 42 8
Bahrain 587 =41 29 2
Kuala Lumpur 571 51 14 -6
Mumbai 562 58 20 -5
Riyadh 507 69 50 -1
Both Hong Kong and Singapore have sub-indices. Shanghai currently sits in 11th
continued to show a stable and strong place and Beijing has risen by 38 points
performance. They are in 3rd and since GFCI 6 to 15th place. Shanghai
4th places in all industry sector and does particularly well in the Banking,
competitiveness sub-indices, with the one Asset Management and Insurance
exception of Singapore’s 5th place in the sub-indices. Beijing does well in the
Insurance sub-index. Tokyo, which, with Insurance sub-index where it is in 7th
the exception of GFCI 5, has always place. Seoul, with an increase of 39 points
appeared in the top ten, has risen two has risen seven places in the rankings to
places to 5th, and is the third highest 28th.Other notable improvements are
ranked Asian centre. It is a leading recorded by Taipei and Osaka.
financial centre that performs well in
most areas, placing it in the top 10 in all
18
Chart 12
Profile of Asian Centres

Hong Kong – – Beijing
Singapore Dubai
Shanghai

Tokyo Seoul Bahrain Bangkok
Shenzhen Kuala Lumpur
Taipei Mumbai

– Osaka Jakarta Riyadh
Manila
Qatar
Hong Kong and Singapore have clear Asian centres are particularly well
profiles as Global Leaders. Beijing, Dubai supported by Asian respondents in both
and Shanghai are Global Contenders at the number of assessments and the
present, in that they are all well- average assessment given. Outside of
connected but do not currently have Asia, the North American responses are
sufficient breadth or depth in their more positive than average. The number
financial services sectors to be Global of assessments given to Asian centres by
Leaders. Shanghai is currently the American and European based
strongest performer of the three. Tokyo respondents is also low, suggesting that
profiles here as an Established Asian centres are far less well known, and,
Transnational centre, in that it has probably as a consequence, less highly
breadth and depth of financial services regarded than from within Asia.
but does not currently demonstrate the Respondents from the offshore centres
required global connectivity. Seoul is also also rate them less positively than
a well diversified financial centre but average. This pattern can be seen in the
currently lacks the depth of coverage in following charts.
most sectors to be considered a leader.
Shenzhen, despite its 9th place in GFC 7,
only has a 58% connectivity rating and is
thus profiled as a ‘Transnational’ centre
rather than a ‘Global’ one.
It is useful to examine the pattern of

assessments by region given to some of
the major Asian centres, to see where
they are well-regarded. In general, the
19
Chart 13
Location >
Assessments
Asia 46%
by Region –
the Mean –
North America 6%
Hong Kong
Offshore 23%
-200 -150 -100 -50 0 50 100
Mean without region
Chart 14
Location >
Assessments
Asia 47%
by Region –
the Mean –
North America 7%
Singapore
Offshore 21%
-200 -150 -100 -50 0 50 100
Mean without region
Chart 15
Location >
Assessments
Asia 69%
by Region –
the Mean –
North America 5%
Shanghai
Offshore 7%
-200 -150 -100 -50 0 50 100
Mean without region
20
Chart 16
Location >
Assessments
Asia 54%
by Region –
the Mean –
North America 9%
Tokyo
Offshore 7%
-200 -150 -100 -50 0 50 100
Mean without region
Chart 17
Location >
Assessments
Asia 82%
by Region –
the Mean –
North America 1%
Shenzhen
Offshore 2%
-335 -200 -150 -100 -50 0 50 100
Mean without region
The GFCI questionnaire asks which

centres are likely to become more
significant in the next few years. As with
GFCI 6, Asia features very strongly and is
where respondents expect to observe
the most significant improvements in
performance, with Seoul entering the top
five here:
Table 8
The Five Centres Financial Centre Number of Mentions since GFCI 6
Believed to be
Suffering Most Shanghai 111
from the Crisis Shenzhen 51
Seoul 35
Beijing 35
Singapore 31
21
Table 9
Centres Where Financial Centre Number of Mentions since GFCI 6
New Offices will
be Opened Shanghai 35
Hong Kong 29
Shenzhen 18
Beijing 15
Singapore 14
GFCI respondents have been predicting

the rise to prominence of Shanghai for
the past two years. Shanghai and
Shenzhen are centres that we will
continue to monitor closely.
In past editions of the GFCI, Dubai has

been repeatedly mentioned as a centre
both likely to become more significant
and where new offices will be opened.
Here, however, Dubai features in neither
category perhaps as a result of its recent,
widely reported, financial difficulties.
22
Offshore Financial Centres
The offshore centres have come under a has been to increase the transparency of
fair degree of scrutiny during the financial the internationally agreed tax standards.
crisis. Many offshore centres are The scores of the offshore centres have
regarded as ‘tax havens’ and there has generally risen in GFC 7, but not by as
been significant pressure applied to these much as those of many other centres,
centres by many national regulators as while their rankings have, with the
well as international bodies such as the exception of the Isle of Man, declined:
OECD. A key demand of the regulators
Table 10
Top Offshore Centre GFC 7 Rating GFC 7 Rank Change in Rating Change in Rank
Centres in GFC 7 since GFCI 6 since GFCI 6
Jersey 643 =18 3 -4

Guernsey 632 22 -6 -7
Isle of Man 618 =24 9 0
Cayman Islands 615 =28 7 -2
Hamilton 612 =31 15 -3
British Virgin Islands 596 37 12 -3
Gibraltar 568 53 25 -2
Bahamas 557 59 6 -11
Mauritius 552 60 16 -2
Jersey increases its small lead over As shown in GFCI 6, there continues to be
Guernsey, the two centres having scored a strong correlation between GFCI
within 4 points of each other since GFCI. ratings and the OECD status: the offshore
Jersey is ahead of Guernsey in nine of the centres which are on the OECD ‘White
ten sub-indices; Guernsey is rated just List’, such as the Channel Islands, have
ahead of Jersey in the Professional higher GFCI ratings, whereas centres
Services sub-index. There continues to be such as the Bahamas and Gibraltar
significant pressure applied to so-called (on the OECD ‘Grey List’) are well below
‘tax havens’ and the OECD is regularly the White Listed centres.
updating its lists of financial centres that
are complying with their requests.
23
Chart 18
Profile of Offshore Centres

– – – –

– – British Virgin Islands –
Cayman Islands
Gibraltar
Guernsey
Hamilton
Isle of Man
Jersey

– – Bahamas –
Malta
Mauritius
As might be expected, the offshore All the top offshore centres achieve
centres are profiled as either higher than average assessments from
International Specialists or Local other offshore centres and generally
Specialists if their international lower responses from elsewhere,
connectedness is lower. They are profiled particularly with regard to the
as specialists because of the quality and respondents from Asia. Asian responses
depth of their asset management sector. were particularly low for Jersey and
For most of the offshore centres, a Guernsey; for Jersey the average Asian
significant proportion of their assessments response was 157 points lower than the
are coming from other offshore centres. mean (515 against 672) and for Guernsey
Jersey and Guernsey are near the border 193 points (470 against 663):
between Global and Transnational and
wider global awareness would move
them up to the profile of Global
Specialists. Both these centres are
working to change perceptions and to
‘rise above’ the status of offshore
specialist centres by being seen as more
diversified, although the following charts
of average assessment by region suggest
that they still have some way to go with
changing global perceptions.
24
Chart 19
Location >
Assessments
Asia 15%
by Region –
the Mean –
North America 2%
Jersey
Offshore 59%
-200 -150 -100 -50 0 50 100
Mean without region
Chart 20
Location >
Assessments
Asia 13%
by Region –
the Mean –
North America 2%
Guernsey
Offshore 61%
Mean without region (2nd vertical axis)

-200 -150 -100 -50 0 50 100
Mean without region
Chart 21
Location >
Assessments
Asia 27%
by Region –
the Mean –
North America 10%
Cayman Islands
Offshore 42%
-200 -150 -100 -50 0 50 100
Mean without region
25
The GFC World
50
=45
5
=45 38 70
71
52 =28 68
=41
4
=24
=31 35 67
=1 39
9
22 20 13 3 33 62
=18 =18 8
7 43 72
8
48 47
=45 49
65 73 74 =15
53 =28
56 34 5
11
=41
69 36=24 9 21
=9
3
58
66
61
51 66
4
=63
60
=54
=9
=26
44
26
75
23
=26
12
6 14
=1
17
=15
=31
59
57 =28
37
Key
Broad & Deep Relatively Deep
Global Leaders Global Specialists
Established Transnational Transnational Specialists
Established Players Local Nodes =54

40
Relatively Broad Emerging
Global Diversified Global Contenders

=63
Transnational Diversified Transnational Contenders
Local Diversified Evolving Centres
27
Table 11
GFC 7 Ratings1
GFC 7 Rank GFC 7 Rating GFCI 6 Rank GFCI 6 Rating Change Change
in Rank in Rating
London =1 775 1 790 3 0 -15
New York =1 775 2 774 1 1 1
Hong Kong 3 739 3 729 3 0 10
Singapore 4 733 4 719 3 0 14
Tokyo 5 692 7 674 1 2 18
Chicago 6 678 8 661 1 2 17
Zurich 7 677 6 676 5 -1 1
Geneva 8 671 9 660 1 1 11
Shenzhen =9 670 5 695 5 -4 -25
Sydney =9 670 11 651 1 2 19
Shanghai 11 668 10 655 5 -1 13
Toronto 12 667 13 647 1 1 20
Frankfurt 13 660 12 649 5 -1 11
Boston 14 652 17 634 1 3 18
Beijing =15 651 23 613 1 8 38
San Francisco =15 651 18 634 1 3 17
Washington D.C. 17 647 20 630 1 3 17
Jersey =18 643 14 640 5 -4 3
Luxembourg =18 643 16 637 5 -2 6
Paris 20 642 19 630 5 -1 12
Taipei 21 638 25 609 1 4 29
Guernsey 22 632 15 638 5 -7 -6
Vancouver 23 623 29 589 1 6 34
Isle of Man =24 618 24 609 3 0 9
Dubai =24 618 21 617 5 -3 1
Montreal =26 617 32 586 1 6 31
Melbourne =26 617 33 584 1 7 33
Seoul =28 615 35 576 1 7 39
Edinburgh =28 615 27 605 5 -1 10
Cayman Islands =28 615 26 608 5 -2 7
Dublin =31 612 22 613 5 -9 -1
Hamilton =31 612 28 597 5 -3 15
Munich 33 610 30 588 5 -3 22
Osaka 34 606 38 565 1 4 41
Amsterdam 35 604 31 586 5 -4 18
Qatar 36 600 44 558 1 8 42
British Virgin Islands 37 596 34 584 5 -3 12
Stockholm 38 595 36 569 5 -2 26
Brussels 39 591 37 568 5 -2 23
Sao Paulo 40 590 42 560 1 2 30
Copenhagen =41 587 41 560 3 0 27
Bahrain =41 587 43 558 1 2 29
Vienna 43 583 46 555 1 3 28
Wellington 44 582 54 541 1 10 41
Madrid =45 581 40 560 5 -5 21
28
GFC 7 Rank GFC 7 Rating GFCI 6 Rank GFCI 6 Rating Change Change
in Rank in Rating
Oslo =45 581 56 538 1 11 43
Milan 47 579 47 554 3 0 25
Monaco 48 578 39 563 5 -9 15
Rome 49 574 57 537 1 8 37
Helsinki 50 573 59 533 1 9 40
Kuala Lumpur 51 571 45 557 5 -6 14
Glasgow 52 570 49 550 5 -3 20
Gibraltar 53 568 51 543 5 -2 25
Johannesburg =54 566 50 550 5 -4 16
Rio de Janeiro =54 566 61 532 1 7 34
Malta 56 565 52 543 5 -4 22
Mexico City 57 563 55 541 5 -2 22
Mumbai 58 562 53 542 5 -5 20
Bahamas 59 557 48 551 5 -11 6
Mauritius 60 552 58 536 5 -2 16
Bangkok 61 549 60 532 5 -1 17
Prague 62 543 65 492 1 3 51
Jakarta =63 535 62 511 5 -1 24
Buenos Aires =63 535 63 507 3 0 28
Lisbon 65 529 66 477 1 1 52
Manila 66 527 64 494 5 -2 33
Warsaw 67 520 69 456 1 2 64
Moscow 68 516 67 462 5 -1 54
Riyadh 69 507 68 457 5 -1 50
St. Petersburg 70 501 70 453 3 0 48
Tallinn 71 488 71 445 3 0 43
Budapest 72 481 74 425 1 2 56
Athens 73 480 73 433 3 0 47
Istanbul 74 470 72 442 5 -2 28
Reykjavik 75 447 75 415 3 0 32
1 Note: Scores have been rounded to the nearest whole number. Where centres
have tied, this is given as an equal ranking and they are listed in order according
to their underlying scores,
29
Industry Sectors
The GFC 7 dataset can be used to London has been outside of the top two
produce separate industry sector sub- places in any sub-index. London remains at
indices for the Banking, Asset the top in the Asset Management and
Management, Insurance, Professional Professional Services sub-indices, whilst
Services and Government & Regulatory New York retains the lead for the Banking
sectors. These indices are created by sub-index, and has re-taken first place in
building the GFC 7 statistical model using the Government & Regulatory field, seen
only the questionnaire responses from previously in GFCI 4.
respondents working in the relevant
industry sectors. For the first time, Hong Table 12 shows the top 10 ranked financial
Kong appears at the top of one of the sub- centres in the industry sector sub-indices.
indices, rating highest amongst The figures in brackets show how each
professionals in the Insurance sector. centre has moved in these sub-indices
Conversely, London’s position at number since GFCI 6:
three in the same index is the first time
Table 12
Industry Sector Sub-indices (Changes from GFCI 6 in brackets)
Rank Asset Banking Government & Insurance Professional

Management Regulatory Services
1 London 3 (-) New York 3 (-) New York 1 (+1) Hong Kong 1 (+2) London 3 (-)
2 New York 3 (-) London 3 (-) London 3 (-1) New York 3 (-) New York 3 (-)
3 Hong Kong 3 (-) Hong Kong 3 (-) Singapore 3 (-) London 5 (-2) Singapore 3 (-)
4 Singapore 3 (-) Singapore 3 (-) Hong Kong 3 (-) Shenzhen 1 (+1) Hong Kong 3 (-)
5 Tokyo 3 (-) Tokyo 1 (+1) Tokyo 3 (-) Singapore 5 (-1) Zurich 1 (+2)
6 Chicago 1 (+2) Zurich 1 (+2) Chicago 1 (+2) Shanghai 3 (-) Geneva 1 (+2)
7 Shanghai 1(+10) Shenzhen 5 (-2) Frankfurt 5 (-1) Beijing 1 (+2) Jersey 5 (-1)
8 San Francisco 1 (+4) Shanghai 5 (-1) Toronto 5 (-1) Tokyo 3 (-) Chicago 1 (+1)
9 Toronto 1 (+5) Chicago 3 (-) Geneva 1 (+3) Chicago 1 (+1) Toronto 1 (+1)
10 Zurich 5 (-4) Beijing 1 (+3) Zurich 1 (+1) Taipei 1 (+3) Tokyo 1 (+2)
The top five positions in each of the sub- sub-indices, entering the top ten in the Asset
indices are generally occupied by the five Management sub-index for the first time,
top GFC 7 centres. Shenzhen’s 4th position in and appearing in the top ten for three
the ratings from the Insurance sector categories in total, while placing 12th in the
respondents and Zurich’s 5th in the overall GFC 7. Shanghai and San Francisco
Professional Services sub-index are the only have also made significant improvements in
exceptions. The Asian centres have tended the Asset Management sub-index, rising 10
to perform well in the Insurance sub-index and 4 places respectively.
both in GFCI 6 and here, with seven of the
top ten spots filled by Asian centres. The Professional Services area remains
largely unchanged from GFCI 6. The Swiss
Asian centres have also performed well in centres of Zurich and Geneva move into 5th
the Banking sub-index, filling six of the top ten and 6th positions respectively, with Guernsey
places, with Beijing entering the top ten for (5th in GFCI 6) moving out of the top ten.
the first time. Zurich and Geneva have also climbed into
the top ten of the Government & Regulatory
Toronto performs strongly in these sub-index, replacing Paris and Sydney.
30
The Five Key Areas of Competitiveness
The instrumental factors used in the GFC 7 results are compared to identify which
model are grouped into five key areas of factors have the greatest influence on
competitiveness (People, Business which centres. Table 13 shows the top ten
Environment, Market Access, ranked centres in each sub-index (the
Infrastructure and General figures in brackets show how the centre
Competitiveness). The GFC 7 factor has moved in the sub-index rankings
assessment model is run with one set of compared with GFCI 6):
instrumental factors at a time and the
Table 13
Sub-Indices by Areas of Competitiveness (Changes from GFCI 6 in brackets)
Rank People Business Market Access Infrastructure General

Environment Competitiveness
1 New York 1 (+1) New York 1 (+1) London 3 (-) New York 1 (+1) London 3 (-)
2 London 5 (-1) London 5 (-1) New York 3 (-) London 5 (-1) New York 3 (-)
3 Singapore 1 (+1) Hong Kong 3 (-) Hong Kong 3 (-) Hong Kong 3 (-)Hong Kong 3 (-)
4 Hong Kong 5 (-1) Singapore 3 (-) Singapore 3 (-) Singapore 3 (-) Singapore 3 (-)
5 Tokyo 3 (-) Chicago 3 (-) Tokyo 1 (+2) Chicago 1 (+2) Tokyo 1 (+2)
6 Toronto 1 (+3) Tokyo 1 (+3) Zurich 3 (-) Tokyo 5 (-1) Zurich 3 (-)
7 Chicago 1 (+3) Zurich 5 (-1) Shanghai 1(+19) Zurich 5 (-1) Chicago 5 (-2)
8 Sydney 5 (-2) Sydney 3 (-) Chicago 5 (-3) Sydney 1 (+3) Shanghai 1 (+12)
9 Zurich 5 (-2) Geneva 5 (-2) Geneva 1 (+1) Toronto 1 (+3) Geneva 5 (-1)
10 Shanghai 1 (+7) Toronto 1 (+5) Frankfurt 5 (-2) Shanghai 1 (+23) Shenzhen 1 (+9)
London, which has led the field across the General Competitiveness category,
these aspects for previous editions of but does not feature in the top ten for the
GFCI, has here been overtaken by New other sub-indices, ranking 12th in the
York in three areas of competitiveness: People sub-index, 13th in Business
People, Business Environment, and Environment, 17th in Market Access and
Infrastructure. Hong Kong and Singapore 20th in Infrastructure, all of which are
remain in 3rd and 4th place throughout substantial improvements on GFCI 6; this
although Singapore moves ahead of suggests that its ratings are volatile and
Hong Kong into 3rd place in the People susceptible to changes in instrumental
sub-index. factors.
Most of the sub-indices are fairly closely

correlated to the main GFC 7 ranks.
Shanghai, 11th in the overall rankings, has
here climbed into the top 10 in all but one
of the areas (Business Environment) and
has made substantial gains since GFCI 6.
Toronto, 12th overall, makes three
appearances in the top ten here.
Shenzhen, 9th overall, reveals significant

differences in performance across the
areas of competitiveness. Shenzhen has
gained nine places to enter the top ten in
31
Reputation
The reputation of a financial centre is higher average assessment than the

another indicator of potential success. In GFC 7 rating this indicates that
the GFCI model, one way to look at this is respondents’ perceptions of a centre are
to examine the difference between the more favourable than the quantitative
average assessment given to a centre data-based measures alone would
and its overall rating (the average suggest. Table 14 shows the 20 centres
assessment adjusted to reflect the with the highest difference between
instrumental factors). If a centre has a average assessment and GFCI rating:
Table 14
Top 20 Centres City Average Weighted* GFC 7 Rating Difference
Assessments & Assessment
Ratings Shenzhen 733 670 63
Shanghai 723 668 55
Hong Kong 786 739 47
Isle of Man 661 618 43
New York 812 775 37
Singapore 769 733 36
Beijing 684 651 33
London 807 775 32
Jersey 674 643 31
Seoul 645 615 30
Guernsey 660 632 28
Zurich 700 677 23
Tokyo 714 692 22
Chicago 698 678 20
* weighted by Sydney 690 670 20
how recently Toronto 686 667 19
they were given Frankfurt 675 660 15
to be directly San Francisco 665 651 14
comparable with Geneva 683 671 12
the GFCI Boston 664 652 12
It is notable that six of the top ten centres

by this measure are Asian. This would help
explain the strong performance of Asia in
GFC 7. However, it should be stressed that
in the case of Beijing, Shanghai and
Shenzhen, a large number of favourable
assessments came from other Asian
centres rather than from a ‘worldwide’
financial services community. Three of
the top 11 centres by this measure are
offshore centres – although similarly, a
sizeable proportion of their assessments
come from other offshore centres.
32
Summary & Conclusions
This edition of GFC has adopted a new The profiles approach used in this report
approach to investigating the offers another way to classify centres,
competitiveness of different centres, with centres being assigned to a profile
combining the well-established ratings on the basis of their connectivity, and
system with a new set of profiles that look depth and breadth of financial services
at how well connected different centres based there. Here, eight centres are
are, and the breadth and depth of the considered to be global leaders: London,
financial services that they provide. This New York, Hong Kong and Singapore, as
has enabled a more sophisticated in the ratings, and also Chicago, Zurich,
discussion of the underpinnings of Toronto and Frankfurt. This approach also
competitiveness for different types of allows a more sophisticated look at both
centres, particularly important in a global leading and emerging centres than
financial environment that continues to possible from the ratings alone. Tokyo, for
be extremely volatile. example, (fifth overall) showing a strong
performance in terms of its services but
Overall, of the 75 centres rated in GFC 7, with the potential to benefit from
71 centres have received higher scores improving its connections globally, and
and only four have decreased since the emerging centres such as Shanghai,
last report. GFCI 6 demonstrated that Beijing, Dubai and Moscow showing that
whilst the financial crisis had created they have the connectivity to succeed
uncertainty and a significant reduction in but lack the necessary specific sectoral
confidence, the assessments had begun strengths to fulfill their potential as yet.
to recover. GFC 7 demonstrates a more
robust return of confidence. A notable story in GFCI 6 was the rise of
the Asian centres, with all of them
For the first time in the GFCI, London and showing a marked increase in scores. This
New York are equal first, both with 775 strong performance has continued in
points on a scale of 1 to 1,000. In GFCI 6, GFC 7, with all centres apart from
London was 16 points ahead but Shenzhen showing a further increase in
experienced a fall of 15 points in the scores. Particularly notable are the rise of
current ratings. This shift is also reflected Tokyo into fifth place and the substantial
by changes in position in the sub-indices, points increases for Beijing and Seoul.
with New York leading the field amongst Whilst Shenzhen has fallen by 25 points, it
the Banking and Government & remains in the top ten, in 9th place,
Regulatory respondents, and London although lacking the connectivity that
dropping to third in the ratings from the puts Beijing and Shanghai in the ‘global’
Insurance respondents. New York has also set of profiles.
overtaken London in three of the sub-
indices of areas of competitiveness: The GFCI questionnaire asks respondents
People, Business Environment and which financial centres they believe are
Infrastructure. suffering most as a result of the current
financial crisis: the responses indicate
London and New York still lead the that New York, London and Dubai are
ratings, although the gap between them perceived to have been impacted on
and the third placed centre, Hong Kong, the most, with 110, 89 and 51 mentions
continues to diminish, from 81 points a respectively.
year ago and 45 points six months ago to
just 36 points now. With Singapore, in The main concerns voiced about
fourth place by a mere six points, these New York were with regard to the
four centres continue to show stable long potential for new regulatory
term competitiveness as world-leading in arrangements to be damaging to
the rankings. competitiveness. London’s greatest
33
challenges were likewise perceived to be

the fear of a regulatory backlash and the
levels of corporate and personal taxation
that may drive high earners abroad. The
loss of skilled personnel to the industry is a
concern of respondents in all the leading
centres and the most commonly
identified risks posed by the financial crisis
in general are a regulatory ‘kneejerk’
reaction, followed by credit risk and then
a more general recession.
Clearly the Business Environment is

viewed as the key area of
competitiveness - it is mentioned in
responses more often than People and
Infrastructure combined. This is a
reflection of the regulatory reaction to
the financial crisis but also reflects
concerns over taxation. One of the
themes that emerges from the
respondents is the need for predictability
and stability of regulation.
The GFCI has previously highlighted the

need for centres to be connected and
co-operative; this is more important than
ever in times of great uncertainty and
financial instability. The new profiles
approach adopted in this edition reflects
the importance of this, and allows for new
dimensions of competitiveness to be
considered as part of the global financial
infrastructure.
34
Respondent’s Details
Table 15
Respondents by Sector Number and % of Responses
Industry Sector
Banking 502 29.7%
Asset Management 292 17.3%
Insurance 311 18.4%
Professional Services 186 11.0%
Regulatory & Government 85 5.0%
Other 314 18.6%
TOTAL 1,690 100.0%
Table 16
Respondents Number of Employees Worldwide Number and % of Responses
by Size of
Organisation Fewer than 100 436 25.8%
100 to 500 229 13.6%
500 to 1,000 127 7.5%
1,000 to 2,000 96 5.7%
2,000 to 5,000 166 9.8%
More than 5,000 534 31.6%
Unspecified 102 6.0%
TOTAL 1,690 100.0%
Table 17
Respondents by Location Total Number and % of Responses Number and % of New Responses
Location
Europe 521 31% 78 15%
North America 133 8% 24 5%
Asia 578 34% 226 45%
Offshore 449 27% 178 35%
Multiple or Other 9 1% 1 0%
TOTAL 1,690 100% 507 100%
35
Instrumental Factors
Table 18 shows how closely instrumental

factor rankings correlate with the GFC 7
rankings for the top 20 instrumental factors:
Table 18
Top 20 Instrumental Factor R2 with GFCI 7
Instrumental
Factors by Lifestyle Assets 0.685
correlation with Mastercard Centres of Commerce Index 0.595
GFCI 7 World Competitiveness Scoreboard 0.526
Global Competitiveness Index 0.480
Intellectual Capital 0.442
RPI (% change on year ago) 0.393
Credit Ratings 0.379
City Brands Index 0.371
Capital Access Index 0.360
Quality of Roads 0.351
Banking Industry Country Risk Assessments 0.350
Global Cities Index 0.346
JLL Direct Real Estate Transaction Volumes 0.342
Business Environment 0.316
Capitalisation of Stock Exchanges 0.315
The Access Opportunities Index - Business 0.307
The World’s Most Innovative Countries 0.306
Economic Freedom of the World 0.282
Number of International Fairs and Exhibitions 0.277
Airport Satisfaction 0.261
It is interesting to see that the broader This indicates that cities that are successful
measures of competitiveness seem to act at most things are likely to be very
as good indicators for financial centre competitive financial centres. A full list
competitiveness. The ten most highly of instrumental factors is shown opposite,
correlated instrumental factors are all with 1 meaning that the factor has been
broad measures of competitiveness rather updated since GFCI 6:
than being specific to financial services.
36
Table 19
Instrumental Factors
1 – This index has been updated since GFCI 6
Instrumental Factor Source Website
People
Intellectual Capital Price Waterhouse Coopers http://www.pwc.com/extweb/pwcpublications.nsf
Graduates in Social Science
Business and Law World Bank www.worldbank.org/education
Gross Tertiary Education Ratio World Bank www.worldbank.org/education
Visa Restrictions Index Henley & Partners http://www.henleyglobal.com/citizenship/visa-restrictions/
1 Human Development Index UN Development Programme http://hdr.undp.org
Quality of Living Survey Mercer HR www.mercerhr.com
Personal Safety Index Mercer HR www.mercerhr.com
International Crime Victims Survey UN Office of Drugs and Crime http://rechten.uvt.nl/icvs/news.htm#The_2009_ICVS
Lifestyle Assets Price Waterhouse Cooper http://www.pwc.com/extweb/pwcpublications.nsf
World’s Top Tourism Destinations Euromonitor Archive www.euromonitor.org
Number of World Heritage Sites World Economic Forum http://www.weforum.org/en/initiatives/
gcp/TravelandTourismReport
Average Days with Precipitation
per Year Sperling’s BestPlaces www.bestplaces.net
Business environment
1 Business Environment EIU www.economist.com/markets/rankings

1 Ease of Doing Business Index The World Bank www.doingbusiness.org/economyrankings
1 Operational Risk Rating EIU
Global Services Location Index AT Kearney www.atkearney.com
Opacity Index Milken Institute www.milkeninstitute.org/publications
1 Corruption Perceptions Index Transparency International www.transparency.org/publications
1 Wage Comparison Index UBS www.ubs.com
Corporate Tax Rates Price Waterhouse Coopers n/a
Employee Effective Tax Rates Price Waterhouse Coopers n/a
Personal Tax Rates OECD www.oecd.org
1 Total Tax Receipts (as % of GDP) OECD http://oberon.sourceoecd.org
1 Bilateral Tax Information
Exchange Agreements OECD http://www.oecd.org
Index of Economic Freedom Heritage Foundation www.heritage.org/index/countries.cfm
1 Economic Freedom of the World Fraser Institute www.freetheworld.com/release.html
1 Banking Industry Country
Risk Assessments Standard & Poor http://www2.standardandpoors.com
Political Risk Index Exclusive Analysis Ltd http://www.exclusive-analysis.com/
37
Market access
Capital Access Index Milken Institute www.milkeninstitute.org/research
Master Card Centres of Commerce Master Card www.mastercard.com/us/company/en/wcoc/index.html
Access Opportunities Index SRI International www.sri.com/news/releases
Securitisation International Financial Services London www.ifsl.org.uk
1 Capitalisation of Stock Exchanges World Federation of Stock Exchanges www.world-exchanges.org
1 Value of Share Trading World Federation of Stock Exchanges www.world-exchanges.org
1 Volume of Share Trading World Federation of Stock Exchanges www.world-exchanges.org
1 Broad Stock Index Levels World Federation of Stock Exchanges www.world-exchanges.org
1 Value of Bond Trading World Federation of Stock Exchanges www.world-exchanges.org
1 Volume of Stock Options Trading World Federation of Stock Exchanges www.world-exchanges.org
1 Volume of Stock Futures Trading World Federation of Stock Exchanges www.world-exchanges.org
1 Net External Position of Banks Bank for International Settlements http://www.bis.org/statistics/bankstats.htm
1 External Position of Central Banks
(as % GDP) Bank for International Settlements http://www.bis.org/statistics/bankstats.htm
Global Credit Rankings Institutional Investor Magazine http://www.iimagazinerankings.com/
rankingsRankCCMaGlobal09/globalRanking.asp
Infrastructure
1 Office Occupancy Costs CBRE http://www.cbre.com/EN/Research/Global+Reports/

Office Space Across the World Cushman & Wakefield www.cushwake.com/cwglobal
Direct Real Estate Volumes Jones Lang LaSalle www.joneslanglasalle.co.uk
Real Estate Transparency Index Jones Lang LaSalle www.joneslanglasalle.co.uk
E-Readiness Ranking EIU www.economist.com/markets/rankings
Transportation & Infrastructure Assets Price Waterhouse Coopers http://www.pwc.com/extweb/pwcpublications.nsf
City Infrastructure Mercer HR http://www.mercer.com/qualityofliving
1 Airport Satisfaction Skytraxx www.airlinequality.com/AirportRanking/ranking-intro.htm
Quality of Ground Transport Network World Economic Forum http://www.weforum.org/en/initiatives/
Quality of Roads World Economic Forum http://www.weforum.org/en/initiatives/
General competitiveness
World Competitiveness Scoreboard IMD www.imd.ch/research

1 Global Competitiveness Index World Economic Forum www.weforum.org
Global Business Confidence Grant Thornton www.grantthorntonibos.com
1 Foreign Direct Investment Inflows UNCTAD http://www.unctad.org
The World’s Most Innovative Countries EIU http://www.economist.com/markets/rankings/
displaystory.cfm?story_id=13562333
Global Intellectual Property Index Taylor Wessing http://www.taylorwessing.com/ipindex/
1 Retail Price Index Economist www.economist.com/markets/indicators
Cost of Living Survey Mercer HR www.mercerhr.com
City Brands Index Anholt www.simonanholt.com
Global Cities Index AT Kearney http://www.foreignpolicy.com/story/cms.php?story_id=4509
Number of International
Fairs & Exhibitions World Economic Forum http://www.weforum.org/en/initiatives/
City Population Density City Mayors Statistics http://www.citymayors.com/statistics/
largest-cities-density-125.html
38

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Global Financial Centres: March 2010

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March 2010

Chairman, Policy and Resources Committee, City of London

This is the seventh biannual Global issues forward by examining them in

questions raised by respondents in The research underpinning the GFC

the wider issues of concern to deemed to be ‘Global’. If the ratings Table 1

Broad & Deep Relatively Broad Relatively Deep Emerging

Global Leaders Global Diversified Global Specialists Global Contenders

Chicago (678) Paris (642) Geneva (671) Beijing (651)

Established Transnational Transnational Transnational

Boston (652) Amsterdam (604) Bahrain (587) Bangkok (549)

Established Local Diversified Local Nodes Evolving Centres

Washington D.C. (647) Helsinki (573) Jakarta (535) Istanbul (470)

activities to be considered ‘Global

The profiles shown in Table 1 are used

The Main Headlines of GFC 7

GFCI3 GFCI4 GFCI5 GFCI6 GFC7

between North America and Europe will

The GFCI questionnaire asks respondents

The fear of regulatory overload leads the

Business Environment 67 Regulation, taxation and

Clearly the Business Environment is developments seen in GFCI 6. Hong Kong

European Financial Centres

European financial centres have had

Broad & Deep Relatively Broad Relatively Deep Emerging

Global Global Leaders Global Diversified Global Specialists Global Contenders

Transnational Established Transnational Transnational Transnational

Local Established Players Local Diversified Local Nodes Evolving Centres

The remaining centres in the European assessments given to a centre by

-200 -150 -100 -50 0 50 100

Mean without region

Average Assessment – Difference from Mean >

London’s overall average assessment

-200 -150 -100 -50 0 50 100

Mean without region

Average Assessment – Difference from Mean >

Zurich’s overall average assessment was

-200 -150 -100 -50 0 50 100

Mean without region

Average Assessment – Difference from Mean >

Frankfurt’s overall average assessment

North American Financial Centres

The North American Centres have all

Toronto has risen 20 points in the GFC 7

Broad & Deep Relatively Broad Relatively Deep Emerging

Global Global Leaders Global Diversified Global Specialists Global Contenders

Transnational Established Transnational Transnational Transnational

Local Established Players Local Diversified Local Nodes Evolving Centres

-200 -150 -100 -50 0 50 100

Mean without region

Average Assessment – Difference from Mean >

-200 -150 -100 -50 0 50 100

Mean without region

Average Assessment – Difference from Mean >

Chicago has an overall average North American respondents assessed

-200 -150 -100 -50 0 50 100

Mean without region

Average Assessment – Difference from Mean >

Toronto is the only North American

Asian Financial Centres