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

The Global Financial Centres Index
Foreword
Michael Snyder
Chairman, Policy and Resources Committee, City of London
The Global Financial Centres Index 3 (GFCI 3) is the third report produced by the
Z/Yen Group for the City of London which ranks financial centres based on external
benchmarking data and current perceptions of competitiveness. Previous GFCI
reports, and other City of London commissioned research, such as The Impact of
Taxation on Financial Services Business Location Decisions, show that international
financial services firms, and the talented staff that they employ, are both highly
mobile and responsive to a range of both market and non-market factors. These
factors are important to policy makers looking to maintain or improve the
competitiveness of their markets.
GFCI 3 shows that, as in the case of GFCI 1 and GFCI 2, London and New York are the
leading global financial centres, with London continuing to be ahead but by a smaller
margin than in the previous report. This reflects as before the excellent access of
London to markets, skilled staff and a proportionate regulatory regime. With the
Financial Services Action Plan being rolled out across Europe we are seeing a
progressive and welcome reduction in market barriers to international financial
services. In this context, infrastructure and taxation are likely to be even higher on the
list of competitive factors influencing the perceptions of individuals employed in global
firms. On these measures London’s lead is being squeezed and there is no room for
complacency if we are to safeguard and improve the resilience and competitiveness
of this financial centre.
Since the publication of GFCI 2, the collapse of the sub-prime mortgage market in the
US, the subsequent write down of US mortgage-backed financial products, and the
dissemination of the associated credit shock and liquidity crisis through the global
financial system via securitised debt products have shown that international financial
markets are highly interdependent and strongly linked to the real economy. In this
connection it is also worth noting the increased attention that is being paid to the role
of the emerging markets of China, India and Brazil.
As in previous reports, the evidence gathered in GFCI 3 reflects the inputs by financial
services respondents and I would encourage professionals around the globe to
participate in the ongoing survey at www.cityoflondon.gov.uk/GFCI
Michael Snyder
City of London
March 2008
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