London still ranked top financial centre despite Brexit

Brexit and the US election have had a significant impact on the latest Global Financial Centres Index, with big percentage falls for London and New York, though they retain their top two spots in the Index. The 21st Global Financial Centres Index (GFCI 21), published by the China Development Institute (CDI) in Shenzhen and Z/Yen Partners in London, rates 88 financial centres. It said that London and New York fell 13 and 14 points respectively, the largest declines (except for Calgary) in the top 50 financial centres. But there was no change in the top five positions, despite what the report calls the “interesting times in which we live”. London (782), New York (780), Singapore (760), Hong Kong (755) and Tokyo (740) remain the top five financial centres, followed by San Francisco (724), Chicago (723), Sydney (721), Boston (720) and Toronto (719). The index is compiled using 101 instrumental factors provided by third parties including the World Bank, The Economist Intelligence Unit, the OECD and the United Nations, combined with financial centre assessments provided by respondents to the GFCI online questionnaire. The report states that political and social upheaval continues to unsettle financial services, with the volatility of GFCI ratings rising in the second half of 2016. Assessments for London showed a sharp decline immediately after the results of the Brexit referendum were known but recovered later in 2016. It adds that assessments for other European centres fluctuated as people speculated about which centres might benefit from London leaving the EU. Western European financial centres are particularly volatile. Of the 29 GFCI centres in the region, 16 declined and 12 rose. Ratings for Amsterdam, Vienna and Gibraltar fell significantly. In terms of Brexit and the debate over which financial centres in Europe may benefit from any moves from London, it is interesting to note the top ten western European financial centres in the index: London, Zurich, Luxembourg, Geneva, Frankfurt, Munich, Paris, Dublin, Amsterdam and Jersey. Only London features in the Global Top Ten. Not surprisingly, North American assessments were more volatile around the time of the US election, first falling and then rising as the effect of a Trump administration was weighed up, notes the report. Centres in the US, with the exception of New York, rose in the index. Los Angeles moved up 20 points into the top 20 global centres. According to the report, the gap between third place Singapore and second place New York continues to close. Singapore rose by eight points and is now only 20 points behind New York, having been 42 points behind in GFCI 20. The leading financial centres in the Asia/Pacific region rose in the GFCI ratings. Beijing in particular rose significantly and is now within the top twenty centres worldwide, states the report. Financial centres in the Middle East generally improved in the ratings, with strong rises for Abu Dhabi and Tel Aviv. However, Latin American centres continue to struggle, according to the report. Sao Paulo, Rio de Janeiro and Panama all fell significantly. The report states that offshore centres had mixed results, with the British Crown Dependencies remaining stable, whilst Caribbean centres had mixed fortunes with the Cayman Islands and the British Virgin Islands falling, but Bermuda and the Bahamas rising slightly. The index also looked at specific financial services using only the questionnaire assessments from respondents working in the relevant industry sectors. In the case of insurance this was only a small number of respondents. It found the top five centres were New York, Hong Kong, Singapore, Tokyo and London/San Francisco. Mark Yeandle, Associate Director at the Z/Yen Group and the author of the GFCI, said: “We live in uncertain times and financial professionals hate uncertainty. Brexit has caused uncertainty in Europe and the election of Donald Trump has caused uncertainty globally.”

London still ranked top financial centre despite Brexit

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