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Hong Kong ‘world’s top financial centre’

Wednesday 14 December 2011 – by [email protected]

Hong Kong has usurped New York and London as the world’s most developed financial centre, according to a report by the World Economic Forum.

The US dropped down to second place in this year’s rankings owing to a surge in the performance of the Asian jurisdiction’s banking and insurance sectors and an increase in its initial public offerings.

The rise of Hong Kong from fourth in last year’s ‘Financial Development Report’ comes as the authors highlighted concerns about the US and UK being “plagued” by unstable banking systems.

“Hong Kong’s ascent to the top of our index marks a major milestone, the first time in the report’s history that the United Kingdom or the US didn’t come out on top,” said Kevin Steinberg, chief operating officer of World Economic Forum USA.

Fierce rival Singapore this year however dropped down to fourth as a result of a “weakening banking system” and a drying up of securitisation markets. Fifth, sixth and seventh spots were retained by Australia, Canada and the Netherlands.

The review of 60 financial systems and capital markets reports that a worrying 90 per cent of countries have yet to return to the level of capital access they experienced before the 2008 financial crisis.

Related articles:

Hong Kong as China’s global financial centre

ICFR: Asia must not ignore EU crisis

EU financial centres plunge in rankings

Building Singapore as a financial services hub

Steinberg added: “While Western financial centres are understandably focused on short-term challenges, this report should serve as a wake-up call that their long-term leadership may be in jeopardy.”

The report claims that the UK could improve its score by reducing government regulation, improving commercial access to capital, centralising its economic policymaking and improving trust in political leaders.

US authorities are meanwhile advised to examine a lack of efficiency in banking services by addressing high bank overhead costs and low profitability.

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