An influential global financial center is well-connected internationally, diverse, and knowledgeable about a range of financial goods and services. Every six months, the London-based Z/Yen Group releases the Global Financial Centres Index (GFCI), which ranks the top financial centers in the world based on their levels of global competitiveness.
The top three, as listed in the Group’s September 2020 issue, are summarized here. The rankings of 121 financial hubs throughout the world placed these cities at the top. In the areas of business climate, human capital, infrastructure, financial sector growth, and reputation, each was given a grade based on how competitive they were.
3. Shanghai
- GFCI rank: 3
- GFCI rating: 748
Shanghai surpassed Tokyo to take third place in the most recent ranking, however the authors note that there is only a one-point gap between their ratings.
The enormous Shanghai World Financial Centre, which towers over the Pudong neighborhood, serves as the city’s financial hub.
The Shanghai Gold Exchange, which ranks first internationally in terms of trading volume of spot gold, and the Shanghai Futures Exchange, which ranks first globally in terms of trading volume of a number of futures products, are two of the city’s strengths. With 87 percent of the total, it also controls the interbank bond market in China.
2. London
- GFCI rank: 2
- GFCI rating: 742
London and New York alternate holding the top and second spots on this list on a regular basis. The most recent edition has London in second place. The Bank of England (BoE), one of the most illustrious and venerable central banks in the world, is located in London. The London Stock Exchange (LSE) is one of the top five stock exchanges in the world, and the city has a sizable banking industry.
London placed second overall in the GFCI financial competitiveness categories, which were weighted for the index. They consist of its financial sector development, business climate, human resources, infrastructure, and reputational traits.
Brexit is anticipated to have a significant impact on the business climate internationally, but especially in the UK. The end result can include a reduction in the density of financial institutions in London. Due to the uncertain future, many businesses are deciding to migrate to Europe, or at least set up shop there.
1. New York
- GFCI rank: 1
- GFCI rating: 769
Wall Street in New York continues to be associated with finance, thus it is not surprising that it placed in the GFCI rankings. The New York Stock Exchange (NYSE) and the NASDAQ, the two largest stock exchanges in the world based on market capitalization, are located in the city, and some of the biggest banks in the world, including JP Morgan Chase & Co. and Citigroup Inc., have their global headquarters there.
In every competitive category taken into account, including business climate, human capital, infrastructure, financial sector development, and reputational issues, New York came out on top.
