March 16, 2007	Friday	Safar 26, 1428

LONDON, March 15: The Global Financial Centres Index (GFCI) launched here on Thursday shows London and New York as the only two truly global financial centres, well ahead of the two Asian centres of Hong Kong (3rd place) and Singapore (4th place). Zurich is in 5th place, just ahead of Frankfurt.

This new index of competitiveness between 46 of the world’s financial cities has been developed through a long drawn research and it is the first of its kind.

London is currently ranked ahead of New York by five points and leads in all five areas of competitiveness — people, business environment, market access, infrastructure and general competitiveness.

However, the report highlights widespread concerns about the UK tax regime, relative to its competitors.

Michael Snyder, chairman of Policy and Resources at the City of London Corporation, which represents UK financial services, said: “To maintain competitiveness, the UK must take action to address concerns over its corporate tax environment.”

The GFCI shows a change in emphasis of the areas of competitiveness. Currently, the regulatory and tax environments are judged to be the biggest contributors to overall competitiveness. This compares to the City of London’s 2005 report “The Competitive Position of London as a Global Financial Centre,” in which respondents rated people and skills as the most important factors in competitiveness.

It also highlights the changing nature of Asian financial market, with Hong Kong rated third and considered to be a real contender to become a global financial centre. Singapore falls in fourth place, with the emerging markets of Shanghai (24th place) and Beijing (36th place) some way further down the table.

Mr Snyder added: “This index will prove to be an invaluable tool for tracking changing fortunes and perceptions of financial centres.”

Other key findings from the research include: London and New York are the only two global financial centres; Hong Kong is an international financial centre; regulation is currently cited as a decisive factor in the competitiveness of London and New York, too onerous a regulatory environment can directly affect the competitiveness of a financial centre; current thinking is that Shanghai and Tokyo are unlikely to be global centres, Hong Kong seems the most likely Asian city to emerge – assisted by a strong regulatory system and a well-skilled financial services workforce. But the future of Asia is still the subject of conjecture; the commercial property prices in London are not currently hindering competitiveness in financial services; London is falling behind other cities when it comes to the development of its transport network.

The GFCI, conducted by Z/Yen for the City of London Corporation and with additional data from PricewaterhouseCoopers, is the first of what will be a biannual index of competitiveness for 46 world financial centres, charting how they rate relative to each other on an on-going basis.

The index brings together the results of online surveys completed by financial services leaders and 47 separate indices of competitiveness.

It is hoped that the publication of future indexes will chart the shifts in position of financial centres and help answer questions such as; how quickly can a financial centre gain or lose ground on its competitor?; Can you build a major financial centre from scratch (monitoring Dubai)?; is it inevitable that a global financial centre will develop in Asia as the economic power of the region grows?