New York has easily remained the world’s top financial center, with London still second and gaining some ground. Still, also facing a more brutal fight with Singapore and Hong Kong, the Global Financial Centres index showed on Thursday.
New York, in the top spot since deposing London in September 2018, remains well in the lead with 763 points based on surveys of 147 factors covering 121 centers provided by third parties, including the World Bank, OECD, and the United Nations. Its score was boosted by the City’s growing reputation as a center for investment banking and securities and its relatively low property costs and strong regulatory oversight.
The City has a long history as a significant center of finance and is often called Wall Street. Its financial district is home to many influential businesses and is an excellent place for visitors to learn how money works. The iconic Charging Bull statue can be found along Broadway.
London slipped two points to come in at second, but this could be a relief in the Square Mile as fears about Brexit-induced job losses and firms moving elsewhere have failed to materialize. London scored highly in various categories, including innovation, reach of financial activity, business infrastructure, and talent and skills.
Singapore closed the gap with New York, just two points behind at 742. Still, it was only a point ahead of Hong Kong in fourth place, signaling an intensifying battle for the second spot in the biannual index compiled by London-based think tank Z/Yen and China’s Development Institute. The U.S. centers performed well, with five cities in the top 10, reflecting the strength of the U.S. economy, while New York retained its lead in separate fintech rankings, and London overtook San Francisco.
The U.K. government’s main challenge is to develop a strategy for building on the country’s strengths and bolstering its role as a global financial center. It is expected to set out its plan by the end of the year as the negotiations for Britain’s exit from the European Union near their conclusion. But it will take a lot of work to deliver on the undeliverable promises made during the referendum vote. London’s future as the leading European financial center will likely depend heavily on the government’s ability to position the City as a global competitor and separate it from the perceived red tape of European regulation. A study published this week by the Institute of Fiscal Studies noted that more than half of the country’s imports from and exports to the E.U. were of goods or services that were inputs into other products, mainly beyond its control. That means the U.K. will be highly dependent on the broader stability of global trade. The U.K. will retain its cherished title of the most important global financial center if it can.