Global financial hubs have enormous economic clout. These cities are home to the world’s leading financial institutions, stock exchanges, banks, hedge funds, and insurance companies. They offer high living standards, and attract talent from all over the world. Here we take a look at the top ten biggest financial centers in the world.
British think tank Z/Yen Group and the China Development Institute have published 27th edition of the Global Financial Centers Index. The index compares the competitiveness of the world’s leading financial centers. Since 2007, the GFCI has been published twice a year.
It compares the competitiveness of financial centers based on a survey of more than 29,000 people worldwide. It also takes into account more than a hundred indices from the World Bank, the Economist Intelligence Unit, and the Organization for Economic Co-operation and Development (OECD). The financial centers are then ranked in five key areas – infrastructure, human capital, business environment, financial sector development, and reputation & general factors.
These are the top ten biggest financial centers in the world, according to the 27th GFCI report.
10- Los Angeles
Los Angeles is not just about glitz and glamour. It has also emerged as a global financial center. Los Angeles jumped from 19th place in 2017 to 13th spot last year. It occupies the 10th spot with a score of 723 in the latest ranking.
The Swiss city made a huge jump. It was ranked 26th with a score of 706 in last year’s GFCI. Geneva increased its score to 729 to occupy 9th spot in the latest GFCI report. It is one of the most livable and most expensive cities on the planet. Geneva is home to a number of financial institutions, asset management firms, and watchmakers.
8- San Francisco
Even though San Francisco’s score declined from 736 to 732, its ranking jumped from 12th to 8th spot. Every financial center except Geneva witnessed a decline in its score compared to last year. San Francisco is a major technology and financial center. It is home to many large financial institutions and venture capital firms.
Beijing took the 7th place this year, unchanged from last year even though its score declined from 748 to 734. Beijing has often been described as the ‘Billionaire Capital of the World.’ Beijing’s Financial Street is lined with headquarters of the People’s Bank of China, large state-run banks, and insurance companies.
6- Hong Kong
Hong Kong is one of the biggest financial centers in Asia. The city has suffered a little since last year due to pro-democracy protests, which disrupted the transit, retail and tourism in Hong Kong. The Special Administrative Region of China has a high concentration of banking and financial institutions.
Singapore slipped from 4th to 5th place this year. It’s one of the most business-friendly countries in the world. The island-nation has transformed its economy on the back of hard work and political stability. Singapore is a leading destination for wealth management and insurance firms.
Shanghai is home to the world’s fourth largest stock exchange with a market cap of over $4 trillion. Experts predict Shanghai will become the world’s biggest financial center within a decade. In the latest ranking, its score (740) is just one point behind Tokyo.
Tokyo is the world’s third biggest financial center with a score of 741. The Japanese capital is the headquarters of several banking, insurance, and investment giants. The Tokyo Stock Exchange is the third largest in the world, behind only NYSE and Nasdaq. Tokyo is also a ridiculously expensive city to live in.
Despite Brexit, London is the second biggest financial center on the planet with a score of 742. London has been a global financial hub since the London Stock Exchange was founded in 1698. However, the city’s economic prospects don’t look promising because businesses are moving their offices and investments to other cities in Europe due to Brexit. London could fall behind many other cities in the coming years.
1- New York
New York retains the title of the world’s leading financial center. It is home to many of the world’s largest banks, insurance companies, hedge funds, credit rating agencies, and private equity firm. Two of the world’s largest stock exchanges by market cap – NYSE and Nasdaq – are based in New York. It’s a global city with a mix of various cultures.
See the full report here.