London is at the top of the world in the financial sector, according to a new survey by Z/Yen global financial centres index (GFCI). 

The welcome news comes at a stressful time, as the Tory government is struggling to remain united and pass the repeal bill. Theresa May is expected to be passing the EU (Withdrawal) Bill, previously known as the Great Repeal Bill, tonight with a little bit of help from her new friends, Northern Ireland’s Democratic Unionist Party (DUP). The bill which will allow her to incorporate EU law into domestic law after Brexit, might pass, but what is more challenging is whether the bill will stay at its current state and without any amendments when it reaches the committee stage. David Davis, the UK’s Brexit Secretary, has warned that blocking the bill would introduce the risk of a “chaotic” departure from the EU which will affect companies and financial markets. 

The survey then seems to boost the government’s hand, before voting later tonight, since it reinforces May’s position that Brexit is going to be smooth and successful, and reiterating the light, upbeat and positive attitude of the Brexit cheerleaders. But, of course, City firms will continue to worry until the government offers a clearer plan for the future.

Since the Brexit referendum, the uncertainty surrounding exiting the EU has created fears among financiers and London companies which were worried that Brexit would make them less attractive, while others were considering moving part of their operations abroad to remain within the EU’s single market. Already, the Bank of America has announced that it will be moving some of its activities to Dublin, while JP Morgan Chase has bought a new office in Dublin’s docklands area.  Morgan Stanley is relocating 200 staff in Frankfurt and Citi will also be expanding in Germany. 


The GFCI survey which was first released in March 2007, aims at providing evaluations of competitiveness and rankings for the major financial centres across the world. It is updated every March and September and is a valuable reference for shaping policy and investing.  

The survey showed that London, “Interestingly, despite the ongoing Brexit negotiations…only fell two points, the smallest decline in the top 10.” Unlike Brexit, Trump’s views on trade have hurt New York, which fell 24 points. Frankfurt rose to 11 and Dublin to 30. Both are competing to become the next EU financial centre after Brexit. For example, Frankfurt is at the moment the most desirable location due to its infrastructure, but is found to be lacking in international schools and lifestyle.  

According to the survey, New York, London, Singapore, Hong Kong and Tokyo have maintained their lead, but there were new contenders as new economies and financial centres gained traction. London was at the top, followed by New York, Hong Kong in third place, Singapore in fourth and Tokyo in fifth. 

There was a noticeable drop in confidence among the top 25 centres, with 23 falling in the ratings and only two rising. The gap, for example, between Hong Kong in the third place and New York in the second, is only 12 points.  

The survey highlighted that Western European financial centres remained volatile. On the one hand, Frankfurt, Dublin, Paris and Amsterdam rose, but, on the other hand, Zurich, Geneva and Luxembourg fell in the ratings. The uncertainty relates to Brexit and speculation about which will be the next EU financial centre. 

Interestingly, Eastern European centres, like Cyprus, Athens, St Petersburg and Moscow rose in the ratings.

European island centres such as the British Crown Dependencies of Jersey, Guernsey and the Isle of Man did well, because they are seen as a “safe haven from the turmoil in UK and EU.”

Global Financial Centres: Competitiveness

In terms of competitiveness, the business environment was affected by Brexit which was the main source of uncertainty for all of the EU. Another issue that was emphasised in the survey was corruption and US protectionism, particularly, barriers to international trade are a major concern for many businesses. In relation to human capital, the main issues involved language skills and the demand for English in Asia. Terrorism, security and human rights were also increasingly significant. On the issue of taxations, it was stressed that Brexit might lead to higher taxes in the EU. An investment banker in Frankfurt argued that “Brexit will lead to lower taxes in the UK but higher taxes in the EU.”

With competition rising, financial centres mentioned promotion and the reputation of a “good and safe place to live” as the main issues for increasing a centre’s reputation. FinTech infrastructure and increased air travel connectivity were important, while protectionism was found to be damaging in the financial sector development.

In general, London was favoured by respondents working in small and medium-sized companies, while New York was preferred from the smallest and the largest organisations.  Singapore was favoured by firms that employ between 2,000 and 5,000 people. According to a venture capitalist based in New York, “We now have an office in LA but we are also going into Europe now - London is the place to be for FinTech regardless of what they say about Brexit.” An investment banker in Tokyo argued that “If you are a global bank you have to be in all of the top five centres.”

It appears that London’s strong financial position, reputation and competitiveness continue to make it the most attractive financial centre in the world. But Brexit remains a threat to businesses and, as Sir Howard Davies, chairman of the Bank of Scotland and the first chairman of the UK’s Financial Services Authority (1997-2003), told Bloomberg today, “The clock is ticking and in the City people are making contingency plans and at the moment they can only make them on the basis of a hard Brexit... so the longer it goes the more likelihood it is those ‘hard Brexit’ plans will be implemented.” He added that the government would have to start “warming up” people to the fact that an EU bill would have to be settled for the UK to leave the EU. He stressed that firms needed certainty and to know what access they will have to markets in the future.