Business, Legal & Accounting Glossary
Financial center includes a few cities that have considerable influence on the global economy. Trade, financial transactions, investment, and government transactions carried out in financial centres impact the global economy. A city can become a financial center if it has access to capital, a strong regulatory government, and significantly large talent pool. Once a city gains a stronghold over the global economy, it becomes difficult to displace it from its influential position.
Average salaries and amount of corporate taxes paid by companies are indicative of a city’s financial clout. Low corporate taxes for foreign companies attract investors to a city. Some important financial centres include London, New York, Hong Kong, Singapore, Zurich, Frankfurt, Geneva, Chicago, Tokyo, and Sydney.
Huge capital, the large talent pool of qualified professionals, and balanced regulatory conditions helped London become a financial centre. Some past challenges for London included the instability of mortgage lender Northern Rock and aging infrastructure.
New York, US’ financial capital, is an important world financial centre. In early 2008, the Global Financial Centers Index survey found that respondents favoured New York’s banking sector more than that of London’s. But the US subprime crisis and financial meltdown have certainly taken some shine off this financial capital.
It’s difficult to talk about the rapid economic rise of China without mentioning its premier showpiece city- Hong Kong. A huge amount of capital inflow has been a major reason for Hong Kong’s ever-growing clout over global economic matters.
Apart from Hong Kong, Singapore is another Asian city that has grown to become one of the world’s influential financial centres. Incredible infrastructure and a strong banking sector have helped Singapore register itself as an important financial centre.
Many of world’s largest financial institutions are located in Zurich. It is recognized as an important center for private banking and asset management. US subprime crisis has also affected Zurich.
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This glossary post was last updated: 21st April, 2020 | 0 Views.