Asian capitals closing in on London

Be31_MichaelMainelli
Prof. Michael Mainelli, Executive Chairman, Z/Yen.

London retains its number two spot on the global financial chart behind New York and is still the only major worldwide centre in Europe.

However, the Asian capitals of Shanghai, Hong Kong and Singapore are snapping at the heels of the capital, according to the Global Financial Centres Index 29, launched by Z/Yen Group in partnership with the China Development Institute (CDI) in London and Hong Kong.

Hong Kong moved up one to fourth place, behind Shanghai, with Singapore in fifth position. Meanwhile, Tokyo dropped three places from fourth to seventh.

Frankfurt replaced San Francisco in the top ten, gaining seven rungs perhaps benefiting from the exit of the UK from the European Union.

Amsterdam remains a relative minnow, placing 28th despite the fact that it surpassed London as Europe’s largest share trading centre in January, trading an average €9.2bn shares a day.

There has been much debate and discussion about the fate of London as a preeminent global financial centre since the UK left the European Union at the end of 2020.

The UK and European Union are currently thrashing out a memorandum of understanding (MoU) March on regulatory co-operation. It is not intended to be legally binding nor does the UK government expect it to lead to greater access.

However, the memorandum will serve as the starting point for financial services trade negotiations and could lead to greater certainty for the City. The aim is to implement a framework whereby financial services regulators in the UK and EU share information and have open dialogue when making new regulatory decisions.

At the moment, the GFCI 29 index shows a relatively high level of stability in the top half of the index, with few centres changing ten or more places in the rankings.

There was more volatility in the lower half, perhaps reflecting some uncertainty about the resilience of emerging and smaller centres.

Professor Michael Mainelli, Executive Chairman of Z/Yen, said, “GFCI 29 ratings have not returned to the levels of 2019, reflecting a welter of instability in international trade, politics, and economics, not least large-scale interventions by central banks and questions about the future treatment of commercial banks, insurers, and payment providers.”

He added, ‘” Only 44 points on a thousand-point scale separate the top 10 centres. A four-point rise would place Singapore second only to New York. It’s tight at the top, and no time for complacency.”

©BestExecution 2021

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