London Remains Top Financial Center in Survey Despite BrexitBy
New York holds second spot in Z/Yen Group’s global city index
Both cities’ overall scores hit by uncertainty following votes
London has retained the mantle as the world’s top financial center, though uncertainty about the implications of Britain’s vote to leave the European Union saw its lead over Asian rivals narrow, according to a study.
New York held on to second place in the Z/Yen Group Ltd.’s latest Global Financial Centres Index, though its overall rating was hit by concern following the U.S. election of Donald Trump. London and New York fell 13 and 14 points respectively, the largest declines in the top 50 financial centers other than Calgary. Singapore and Hong Kong, the two leading Asian centers, narrowed the gap between themselves and the top two to about 25 points on a scale of 1,000, the index showed.
"We live in uncertain times and financial professionals hate uncertainty," Mark Yeandle, associate director of Z/Yen and author of the GFCI, said in the study Monday. "Brexit has caused uncertainty in Europe and the election of Donald Trump has caused uncertainty globally.”
Britain’s role as the world’s pre-eminent banking hub is at risk if the U.K.’s separation from the EU costs banks their ability to easily serve clients across the region. U.S. banks currently sell their goods and services throughout the bloc from bases in London, but the so-called passporting rights enabling that are unlikely to be extended after Brexit.
Frankfurt and Dublin -- emerging as the top two destinations for bankers looking to establish new trading hubs inside the EU -- ranked 23rd and 33rd respectively, both down on previous years. Paris came in 29th, the index by the London-based consulting firm showed.
The index, which is updated every six months and is in its 21st edition, was compiled from an online survey of more than 3,000 financial professionals. It also uses external gauges in areas including the business environment, financial industry development, infrastructure, human capital and reputation.