London still losing ground to New York as world’s leading financial centre

A new report from Duff & Phelps suggests that London continues to lose ground to New York as the world’s leading financial centre, although the UK retains the world’s favourite regulatory regime. Duff & Phelps’ latest Global Regulatory Outlook report surveyed 250 senior financial sector professionals from around the world. It reports that 31% of senior financial professionals perceive London to be the foremost global financial centre, down from 34% last year, and a fall of 22% since 2018. The survey finds that 60% of senior financial services decision-makers globally now believe New York is the top financial centre (an increase from 56% last year). It notes that only 15% of respondents expect the Biden administration in the US to bring in stricter financial regulation. According to Duff & Phelps: “With the full effects and implications of Brexit yet to play out, no clear European successor to London has emerged.” It adds that while both Paris and Frankfurt have been touted as potential alternatives to London post-Brexit, any such move is still some way off, and no other European city is seen as the pre-eminent global financial hub according to the survey respondents. An important aspect for London is its regulatory environment and this could be key to doing well in the future, says Duff and Phelps. The UK is still home to the world’s favourite regulatory regime, named by 31% of those surveyed, compared to 25% for the US and the same for Singapore, according to the survey. Monique Melis, managing director and global service leader of compliance and regulatory consulting at Duff & Phelps, said: “New York has continued to gain at London’s expense over the last few years. The start of 2021 saw the UK and the US arrive at what may be the beginning of new eras for both countries. In the UK, arrival at a Brexit deal marks the start of Britain’s journey outside the EU and the Biden presidency could see potentially profound policy changes in the US. The future momentum and trajectory of either country’s financial services sector strategy is not set in stone.” She continued: “Despite London’s recent decline, the UK continues to retain some important advantages, particularly its regulatory environment where it’s still ranked ahead of the US and Singapore. This unique advantage could be the key to keeping London competitive, particularly as compliance costs for businesses continue to grow. As long as regulatory considerations continue to inform decision making, London has an opportunity to preserve its relevance.” As for emerging markets, east Asia looks set to be the most likely future financial hub among all other emerging markets, the survey reports. Almost two thirds (64%) of respondents marked China as the most likely future candidate. The survey states that when asked to name the likely pre-eminent global financial hub in five years, 11% said Shanghai and 7% Hong Kong. Duff & Phelps notes that while China dominates among the emerging markets when it comes to financial centres, other countries are also likely to see their financial centres grow. About one in six (16%) of respondents said India has the greatest potential to be the next big global financial hub.

London still losing ground to New York as world’s leading financial centre

Want to read this article?

Read Next

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Want to read this article?

Read Next

Insurtech partners with USAID on climate adaptation programme

ICEYE in data collaboration with Juniper Re on flood and wildfire

Senior appointments in Lockton’s crisis management team

European rates up overall but financial and cyber lines falling: Marsh

European Parliament approves regulation to tackle forced labour

Related Articles