A dominant global financial center has international connectedness, diversity, and expertise in a variety of financial products and services. The Z/Yen Group publishes the Global Financial Centres Index (GFCI) every six months and provides a ranking of the world’s top financial centers according to their international competitiveness. Below is a summary of the top three, as published in the Group’s March 2020 edition.
- New York is the top-ranked financial center, thanks to Wall Street, the presence of numerous financial and technology companies, and the two largest stock exchanges in the world, the New York Stock Exchange and the NASDAQ.
- London is the second highest-ranked financial center, although it often swaps the top spot with New York; London earns its place due to the London Stock Exchange, the Bank of England, and the size of its banking industry.
- Tokyo is the third-largest financial center overall and the largest center in Asia, jumping three spots from the last ranking; Tokyo is home to the Tokyo Stock Exchange, the third-largest in the world by market capitalization.
GFCI Rank: 3
GFCI Rating: 741
Coming in third place overall, Tokyo is a major world financial center, is home to several of the world's largest banks, insurers, and technology companies, and is the nexus of Japan's broadcasting, publishing, entertainment, and transportation industries. Tokyo is the home of the Tokyo Stock Exchange, the third-largest stock exchange in the world by market capitalization, following the New York Stock Exchange and the NASDAQ.
While ranked number three globally, Tokyo took first place among the Asia/Pacific region, coming in ahead of China, Singapore, and Hong Kong, which was third in the previous report. According to the report, Tokyo had a fourth-place ranking in the competitive area of infrastructure. The city was also ranked sixth for the competitive area of reputational & general and 10th for financial sector development.
GFCI Rank: 2
GFCI Rating: 742
London was in second place after New York for the second index in a row, although the two often exchange first place. London is home to the Bank of England (BoE), one of the most prestigious and oldest central banks in the world. The London Stock Exchange (LSE) is among the world’s top five stock exchanges, and the city has one of the world’s largest banking sectors.
In the GFCI financial competitiveness categories, London ranked second across the board, for the business environment, human capital, infrastructure, financial sector development, and reputational and general. Brexit is having a substantial impact on the business environment globally, and particularly in the United Kingdom's position as a financial center. London could lose much of its financial institutional density depending on the outcome of Brexit. Many firms are choosing to relocate due to future uncertainty.
The number of financial centers ranked in the index.
1. New York
GFCI Rank: 1
GFCI Rating: 769
New York, with its renowned Wall Street, whose reputation is synonymous with finance, took first place in the GFCI rankings. The city is home to the two largest stock exchanges—the New York Stock Exchange (NYSE) and the NASDAQ—in the world based on market capitalization, and some of the world’s largest banks have their headquarters there—JP Morgan Chase & Co. and Citigroup Inc.
New York ranked first for all competitive areas—business environment, human capital, infrastructure, financial sector development, reputational & general.