Gold Magazine November - December 2013, Issue 32 | Page 90

finance

{ECONOMY}

L

LONDONCentre rankings
TOPS
International Financial

ondon has come out on
top in its annual battle with
New York to be named the
world’s leading international
financial centre (IFC) by
The Banker. London leads
this year’s IFC ranking, which measures the
performance of the IFCs in a series of financial market, business and economic indicators, and puts a premium on international
appeal rather than size.
The UK capital scores similarly to New
York – last year’s leader and now in second
place – within the financial markets data
category, but excels in factors such as business friendliness and the depth of the various
business clusters present in the city. London
also generates the largest value of outward as
well as inward foreign direct investment in
the financial sector.
It is worth noting London’s leadership in
various components that contributed to its
financial markets score, such as the number
of new foreign listings (a total of 36 against
New York’s 29) and the issuance of international debt securities ($3,401 billion against

LONDON EXCELS IN
FACTORS SUCH AS BUSINESS
FRIENDLINESS AND THE
DEPTH OF THE VARIOUS
BUSINESS CLUSTERS
PRESENT IN THE CITY
New York’s $1,977 billion). However, New
York still boasts the largest volumes of assets
under management – $920 billion – among
the firms that it plays host to.
Singapore and Hong Kong are in third
and fourth positions, respectively, the latter
displacing Frankfurt, which is now in fifth
place. Small shifts are present throughout
the ranking, with the only noticeable exception being Mexico City, which jumped from
30th place in the 2012 ranking to 15th position this year. The Latin American centre
– the highest scoring in its region – boasts a
growing international stock exchange, which
last year hosted its largest ever initial public
offering. The $4.13 billion listing of the
Mexican operations of Spanish bank San-

tander at the end of 2012 confirmed the rising international reputation of Mexico City
as an IFC to be reckoned with.
Also of note is that the second-highest-placed
Latin American IFC is Panama City, ahead
of Sao Paulo. The Brazilian metropolis is
widely perceived to be the region’s main
financial gateway but the city’s sizeable financial markets are not yet matched by a high
quality in factors such as business friendliness and cost indicators, where Panama City
scores highly. The Panamanian capital also
scores impressively when it comes to economic factors.
The Asian IFC that has shown the greatest
improvement is Beijing, moving from 36th
position in 2012 to 32nd this year in the
overall ranking. It now ranks seventh among
Asian IFCs, overtaking eighth-placed Kuala
Lumpur. Like Beijing, Bangkok has also
climbed up four positions in the global ranking and comes in ninth regionally.
Despite dropping one place in the global
ranking, San Francisco has improved its
regional standing and now stands third in
North America, up from fourth position last
year. San Francisco-based Wells Fargo’s stellar performance in the latest financial year
has pushed the Californian city to fifth place
from eighth in the banking pre-tax profit
table. Wells Fargo, the world’s eighth largest
bank by Tier 1 capital, posted pre-tax profits
of $28bn in 2012, up 20% on 2011.
In terms of cost factors, the number one
global IFC is Copenhagen. The Danish capital, widely perceived to have expensive labour
and cost of living levels, offers employers office occupancy costs lower than many emerging market locations, as well as exceptionally
low employment termination costs.
In the specialised financial centres table, the
Cayman Islands retains its lead, although
Jersey replaces Guernsey in second position.
Bermuda and Barbados are the most improved, each jumping three positions to sit in
fifth and eighth place, respectively. Most of
the data for the specialised financial centres
ranking is supplied to The Banker by each
centre. In the current financial environment,
some chose not to respond to our survey,
which is why Cyprus, for example, does not
feature in this year’s tables.

90 Gold THE INTERNATIONAL INVESTMENT, FINANCE & PROFESSIONAL SERVICES MAGAZINE OF CYPRUS

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07/11/2013 15:58