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New York pips London to world's top financial hub rankings again

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·Digital finance editor
·3 min read
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New York City has once again taken the top spot in the Global Financial Centres Index. (Reuters)
New York City has once again taken the top spot in the Global Financial Centres Index. (Reuters)

London continues to lag behind New York as the most attractive financial centre of the world, an apparent legacy of Brexit that has made the UK capital take the second spot in Global Financial Centres Index (GFCI) rankings for the third year in a row. 

New York has held on to the top position in the index since 2018, with London in second place, followed by Hong Kong and Singapore in third and fourth.

Published on Friday by Z/Yen Group in partnership with the China Development Institute (CDI), the GFCI assesses future competitiveness and rankings for 116 financial centres around the world, serving as a reference guide for investors and policy makers. 

New York also took the top spot on the index's FinTech rankings, followed by Shanghai. London came third, rising two places since last year. 

Overall, North American centres performed well in the rankings, reflecting renewed optimism about the US and Canadian economies as COVID vaccination drives help get a grip on the pandemic. 

GFCI rankings
The GFCI is compiled using 146 instrumental factors. These quantitative measures are provided by third parties including the World Bank, the Economist Intelligence Unit, the OECD and the United Nations. Credit: Z/Yen Group/China Development Institute

Cities in western Europe also performed well, with most gaining rank position. 

Paris jumped 15 positions to take the 10th spot, while Amsterdam jumped 11 positions taking the 17th rank. Frankfurt, however, dropped from top 10, slipping five spots to 14th. All the three cities have been hopeful of wooing big business away from London with Britain's departure from the European Union since Brexit.  

In January, Amsterdam surpassed London as Europe’s largest share trading centre by absorbing much trade in euro-denominated assets, though London has been back on top recently. 

London, however, continues to lead in Europe, reflecting investor confidence in the longer-term prospects for the City.

"The cities [New York and London] are closely matched, but it does seem that London’s attractiveness has fallen slightly in comparison with New York over the period following the Brexit vote in 2016. We will continue to track their progress," Mike Wardle, director of Z/Yen Group, told Yahoo Finance. 

Read more: European markets down as investors continue to fret about Evergrande

The rankings also show that Asia/Pacific centres have fallen in the ratings, and GFCI assessments suggest a less favourable view of Chinese cities indicating economic gains in the region arising from the pandemic may be levelling off.

On the other hand, the relatively strong performance of New York and London suggests that the financial services sectors in these cities managed to sustain their performance despite radical changes in working practices during the last 18 months.

“We see two patterns in the results for GFCI 30 [30th edition] – confidence in the recovery of the North American and Western European economies following the shock of 2020; and a levelling off following the rapid rise of Asia/Pacific centres and their economic stability in the COVID-19 pandemic," said Professor Michael Mainelli, executive chairman of Z/Yen.

He said in a statement that competition remains tight and that "outside the top two centres, only five points on a 1,000 point scale separate the centres ranked third to eighth”.

Watch: UK considers joining US-Mexico-Canada trade deal

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