London-based consultancy Y/Zen has published the 22nd edition of its Global Financial Centres Index (GFCI 22), ranking London once again in the top spot and New York City second. Hong Kong has replaced Singapore to claim third place, while Tokyo remains fifth globally.

To calculate ratings, the GFCI model assesses five areas of competitiveness: business environment, human capital, infrastructure, financial sector development and reputation. The ranking reveals an overall drop in confidence in the centres, as the index’s points system shows 23 of the 25 leading centres dropping ratings.


New York’s rating, for example, fell 24 points from the previous index (on a 1000-point scale), the largest drop among the top 10 placeholders, a decline the index attributes to concerns over US trade. London, meanwhile, only fell by two points, despite Brexit uncertainty – “the smallest decline in the top 10 centres”, the report says.

“The essential ingredients that have made London the number one financial centre aren’t going to change,” said Giles Fitzpatrick, partner at merchant bank Hannam & Partners. These ingredients, he said, include a history as a transparent and open centre for finance, the UK’s time zone and language advantage, and the pool of talent that is attracted to and developed in London. “Economics and politics are passing, but you need a tradition in open business,” he added. 

Western European financial centres were described as “volatile”, while speculation continues regarding which cities will gain the most from the UK’s EU departure. Mr Fitzpatrick suggested that Paris, Madrid and Frankfurt are some of the most obvious European centres to look at, while noting some of the disadvantages other EU contenders might face.

“The only problem with cities like Luxembourg and Dublin is that they have a much narrower service set and pool of talent due to their smaller populations and economies,” he noted. “The service economies aren’t the size needed to compete with a centre like London.”

All of North America’s centres slipped down the rankings, with US cities New York, San Francisco (10 places), Boston (10 places), Washington DC (16 places), and Chicago (17 places) taking a deeper dive than Canadian financial centres, which nevertheless saw dips in their rankings.  

Europe’s island centres performed well with points increases in their ratings. “The British Crown Dependencies of Jersey, Guernsey, and the Isle of Man all performed strongly and there were also strong rises for Malta, Reykjavik, and Gibraltar,” said the index. According to one London-based invester, “the British crown dependencies are seen as a safe haven from the turmoil in UK and EU.”

The Caribbean performed well in the GFCI 22, with the British Virgin Islands and the Bahamas enjoying strong rises in ratings. This, however, was calculated before Hurricane Irma hit the region, devastating much of its infrastructure and causing massive power outages and millions of dollars in property damage. The islands’ ability to recover from the storm and return to business will determine whether this hard-earned recognition will be repeated next year. 

The GFCI rates 92 financial centres and uses more than 23,000 financial centre assessments compiled from more than 3100 financial service professionals who answered the GCFI online questionnaire. This year’s edition was produced in collaboration with the China Development Institute in Shenzhen. The index has been running since 2007 and is published twice yearly.