The global financial centres index (GFCI) 3 - Z/Yen

The Global Financial Centres Index
The roles that the top ten financial centres can play are shown
in Table 3:
Table 3
The Different
Roles of the Top
Ten Financial
Centres
Centre Global International Niche National Regional
London ■ ■ ■ ■ ■
New York ■ ■ ■ ■ ■
Hong Kong ■ ■
Singapore ■ ■
Zurich ■ ■ ■
Frankfurt ■ ■
Geneva ■ ■
Chicago ■ ■ ■
Tokyo ■ ■
Sydney ■ ■ ■
In the past, it has been assumed that international financial
centres developed because of strong domestic economies.
Yet the size of the domestic markets served by London and New
York does not seem to be correlated with the rating of their
international role in the GFCI. The US economy is at least five times
larger than that of Britain’s, but London and New York are rated
similarly as financial centres.
In fact, ‘traffic’ between the domestic economy and the global
financial community is critical. The key function of the domestic
financial community is not its ability to service the domestic
economy’s needs domestically; rather it is its ability to service the
domestic economy’s needs wherever and however they are best
serviced. Thus, a key measure for financial centres, in addition to
how effective they are at providing services locally, is how
effective they are at providing choice and access to global
financial services. On this measure, protected domestic
financial players are clearly a hindrance. Competition leads
to appropriate connectivity with the global financial markets and
connectivity to appropriate global finance is critical to national
economic performance.
GFCI 2 showed that London was 19 points ahead of New York.
In GFCI 3 this differential is reduced to nine points. This move is, in
part, a result of New York’s most recent centre assessments being
higher than those of London – in the 7,193 ‘raw’ assessments
collected via the questionnaire since GFCI 2, the average rating
for New York actually exceeds the average rating of London
(839 points against 793).
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