The Stability of the World's Leading Financial Capitals
London continues to top the list of the world's leading financial centers, with New York close behind in second-place, according the latest edition [PDF] of The Global Financial Centres Index, released today. Sometimes referred to as Ny-Lon, these two cities have dominated global finance for the past couple of centuries.
Hong Kong and Singapore rank third and fourth, with Zurich in fifth place. Tokyo, Geneva, Boston, Seoul, and Frankfurt round out the top 10. Cities in the United States and Canada take the next seven spots, with Chicago in 11th, Toronto 12th, San Francisco 13th, Washington, D.C. 14th, Vancouver 15th, Montreal 16th, and Calgary 17th. The table below (from the report) highlights the top 20 cities in this year's rankings. (See the report for the full rankings.)
Table from report
The GFCI, which covers 79 global cities, is based on existing rankings and measures of cities along with a survey of more than 2,000 financial professionals to assess competitiveness, economic environment, talent, and other factors.
This ranking compares reasonably to my own comprehensive ranking of the world's most economically powerful cities from May 2012.
In my 2009 cover story for The Atlantic, "How the Crash Will Reshape America," I pointed to stability of global financial centers over long historical timelines:
In his sweeping history, Capitals of Capital, the economic historian Youssef Cassis chronicles the rise and decline of global financial centers through recent centuries. Though the history is long, it contains little drama: major shifts in capitalist power centers occur at an almost geological pace.
Amsterdam stood at the center of the world's financial system in the 17th century; its place was taken by London in the early 19th century, then New York in the 20th. Across more than three centuries, no other city has topped the list of global financial centers. Financial capitals have "remarkable longevity," Cassis writes, "in spite of the phases of boom and bust in the course of their existence."
The transition from one financial center to another typically lags behind broader shifts in the economic balance of power, Cassis suggests. Although the U.S. displaced England as the world's largest economy well before 1900, it was not until after World War II that New York eclipsed London as the world's preeminent financial center (and even then, the eclipse was not complete; in recent years, London has, by some measures, edged out New York). As Asia has risen, Tokyo, Hong Kong, and Singapore have become major financial centers — yet in size and scope, they still trail New York and London by large margins. ...
"A crucial contributory factor in the financial centres' development over the last two centuries, and even longer," writes Cassis, "is the arrival of new talent to replenish their energy and their capacity to innovate." All in all, most places in Asia and the Middle East are still not as inviting to foreign professionals as New York or London.