The three top centres are only four points apart following a gap of 16 points between first and third in GFCI 9 published in March. Respondents to the Z/Yen questionnaire believe that these centres work together for mutual benefit. Hong Kong is just three points behind New York and four points behind London. These three centres control a large proportion of financial transactions (with about 70% of equity trading) and are likely to remain powerful financial centres for the foreseeable future.
Offshore centres have suffered reputational damage in the past three years. However, GFCI 10 shows that many are recovering as respondents to the GFCI questionnaire recognise the contribution these centres can make to global finance. Guernsey has risen 28 points, the Isle ofMan, Hamilton and the British Virgin Islands have all risen 27 points and Jersey has risen 26. The Cayman Islands and Gibraltar have also risen. Jersey and Guernsey remain the leading offshore centres.
Qatar rose 39 points to become the leading centre in the Middle East for the first time.
Since 2008 there has been volatility in the ratings of the Asian centres. The report shows the strongest centres are strengthening and consolidating their positions – Hong Kong is up 11 points, Singapore is up 13, Shanghai is up 30 points and Seoul is up 28. Some Asian centres are perceived to have weakened – Tokyo, Beijing, Taipei and Shenzhen have all fallen in the ranks.
The Nordic and eastern European centres got strong support. Centres such as Tallinn (up 118 points in the ratings), Istanbul (up 86 points), Moscow (up 75 points), Helsinki (up 72 points), Copenhagen (up 55 points) and St Petersburg (up 50 points) all demonstrate strong increases in competitiveness.
Although the big three are way out in front, the report argues "London in particular must not rest on its laurels. The Vickers report recommends some fairly fundamental reforms of the banking industry and many in the sector believe that these might damage the competitiveness of London.
Furthermore, tax levels in the UK are unpopular within the financial services sector. In particular, the 50% personal tax rate for top earners (gross income greater than £150K) is the subject of much conjecture as to how much damage it is doing to the competitiveness of London.
"Opinions within the UK’s coalition government are split as to whether the 50% rate should remain. London’s position is still regarded by many as virtually untouchable," the report said.
The index was sponsored by the Qatar Financial Centre for the first time.
