![Manhattan in the distance (Unsplash)](https://upload.wikimedia.org/wikipedia/commons/8/85/Manhattan_in_the_distance_%28Unsplash%29.jpg)
A financial centre (
BE), financial center (
AE), or financial hub, is a location with a concentration of
participants in
banking
A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets.
Becau ...
,
asset management,
insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
or
financial markets
A financial market is a market in which people trade financial securities and derivatives at low transaction costs. Some of the securities include stocks and bonds, raw materials and precious metals, which are known in the financial ma ...
with venues and supporting services for these activities to take place.
Participants can include
financial intermediaries
A financial intermediary is an institution or individual that serves as a middleman among diverse parties in order to facilitate financial transactions. Common types include commercial banks, investment banks, stockbrokers, pooled investment funds ...
(such as banks and brokers),
institutional investors
An institutional investor is an entity which pools money to purchase securities, real property, and other investment assets or originate loans. Institutional investors include commercial banks, central banks, credit unions, government-linke ...
(such as investment managers,
pension funds, insurers, and
hedge funds
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as sho ...
), and
issuers (such as companies and governments).
Trading activity can take place on venues such as
exchanges and involve
clearing houses, although many transactions take place
over-the-counter
Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...
(OTC), that is directly between participants. Financial centres usually host companies that offer a wide range of
financial services, for example relating to
mergers and acquisitions
Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
,
public offering
A public offering is the offering of securities of a company or a similar corporation to the public. Generally, the securities are to be listed on a stock exchange. In most jurisdictions, a public offering requires the issuing company to publish a ...
s, or
corporate action
A corporate action is an event initiated by a public company that brings or could bring an actual change to the securities—equity or debt—issued by the company. Corporate actions are typically agreed upon by a company's board of directors ...
s; or which participate in other areas of
finance, such as
private equity
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...
, hedge funds, and
reinsurance. Ancillary financial services include
rating agencies
A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
, as well as provision of related
professional services
Professional services are occupations in the service sector requiring special training in the arts or sciences. Some professional services, such as architects, accountants, engineers, doctors, and lawyers require the practitioner to hold profe ...
, particularly
legal advice
Legal advice is the giving of a professional or formal opinion regarding the substance or procedure of the law in relation to a particular factual situation. The provision of legal advice will often involve analyzing a set of facts and advising a ...
and
accounting services.
The
International Monetary Fund
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution, headquartered in Washington, D.C., consisting of 190 countries. Its stated mission is "working to foster glo ...
's classes of major financial centres are: International Financial Centres (IFCs), such as
New York City
New York, often called New York City or NYC, is the most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the most densely populated major city in the Un ...
,
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
and
Tokyo
Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and List of cities in Japan, largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, ...
; Regional Financial Centres (RFCs), such as
Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...
,
Shenzhen
Shenzhen (; ; ; ), also historically known as Sham Chun, is a major sub-provincial city and one of the special economic zones of China. The city is located on the east bank of the Pearl River estuary on the central coast of southern province ...
,
Frankfurt
Frankfurt, officially Frankfurt am Main (; Hessian: , " Frank ford on the Main"), is the most populous city in the German state of Hesse. Its 791,000 inhabitants as of 2022 make it the fifth-most populous city in Germany. Located on it ...
, and
Sydney; and
Offshore Financial Centre
An offshore financial centre (OFC) is defined as a "country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy."
"Offshore" does not refer ...
s (OFCs), such as
Cayman Islands,
Dublin
Dublin (; , or ) is the capital and largest city of Ireland. On a bay at the mouth of the River Liffey, it is in the province of Leinster, bordered on the south by the Dublin Mountains, a part of the Wicklow Mountains range. At the 2016 c ...
,
Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
, and
Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
.
![City of London skyline from London City Hall - Sept 2015 - Crop Aligned](https://upload.wikimedia.org/wikipedia/commons/6/6d/City_of_London_skyline_from_London_City_Hall_-_Sept_2015_-_Crop_Aligned.jpg)
International Financial Centres, and many Regional Financial Centres, are full–service financial centres with direct access to large capital pools from banks, insurance companies, investment funds, and listed capital markets, and are major
global cities. Offshore Financial Centres, and also some Regional Financial Centres, tend to specialise in tax-driven services, such as
corporate tax planning tools, tax–neutral vehicles, and
shadow banking
The shadow banking system is a term for the collection of non-bank financial intermediaries (NBFIs) that provide services similar to traditional commercial banks but outside normal banking regulations. Examples of NBFIs include hedge funds, ins ...
/
securitisation
Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling ...
, and can include smaller locations (e.g.
Luxembourg
Luxembourg ( ; lb, Lëtzebuerg ; french: link=no, Luxembourg; german: link=no, Luxemburg), officially the Grand Duchy of Luxembourg, ; french: link=no, Grand-Duché de Luxembourg ; german: link=no, Großherzogtum Luxemburg is a small lan ...
), or city-states (e.g. Singapore). The IMF notes an overlap between Regional Financial Centres and Offshore Financial Centres (e.g. Hong Kong and Singapore are both Offshore Financial Centres and Regional Financial Centres). Since 2010, academics consider Offshore Financial Centres synonymous with
tax havens
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or ...
.
Definitions
FSF–IMF approach
In April 2000, the
Financial Stability Forum
The Financial Stability Forum (FSF) was a group consisting of major national financial authorities such as finance ministries, central bankers, and international financial bodies. It was first convened in April 1999 in Washington. At the 2009 G20 ...
("FSF"), concerned about OFCs on global financial stability produced a report listing 42 OFCs.
In June 2000, the International Monetary Fund (IMF) published a working paper on OFCs, but which also proposed a taxonomy on classifying the various types of global financial centres, which they listed as follows (with the description and examples they noted as typical of each category, also noted):
The IMF noted that the three categories were not mutually exclusive and that various locations could fall under the definition of an OFC and an RFC, in particular (e.g. Singapore and Hong Kong were cited).
Rationale for OFCs
The IMF noted that OFCs could be set up for ''legitimate purposes'' (listing various reasons), but also for what the IMF called ''dubious purposes'', citing tax evasion and money–laundering. In 2007, the IMF produced the following definition of an OFC: ''a country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy''.
The FSF annual reports on global shadow banking use the IMF definition to track the OFCs with the largest financial centres relative to their domestic economies.
![Uncovering Offshore Financial Centers Figure 3 Network of ownership flows between countries](https://upload.wikimedia.org/wikipedia/commons/5/5d/Uncovering_Offshore_Financial_Centers_Figure_3_Network_of_ownership_flows_between_countries.jpg)
Progress from 2000 onwards from
IMF–
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
–
FATF
The Financial Action Task Force (on Money Laundering) (FATF), also known by its French name, ''Groupe d'action financière'' (GAFI), is an intergovernmental organisation founded in 1989 on the initiative of the G7 to develop policies to combat mo ...
initiatives on common standards,
regulatory compliance, and banking transparency, has reduced the regulatory attraction of OFCs over IFCs and RFCs. Since 2010, academics considered the services of OFCs to be synonymous with
tax havens
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or ...
, and use the term OFC and tax haven interchangeably (e.g. the academic
lists of tax havens include all the FSF–IMF OFCs).
In July 2017, a study by the
University of Amsterdam
The University of Amsterdam (abbreviated as UvA, nl, Universiteit van Amsterdam) is a public research university located in Amsterdam, Netherlands. The UvA is one of two large, publicly funded research universities in the city, the other being ...
's CORPNET group, broke down the definition of an OFC into two subgroups,
Conduit and Sink OFCs:
* 24 Sink OFCs: jurisdictions in which a disproportionate amount of value disappears from the economic system (e.g. the traditional
tax havens
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or ...
).
* 5 Conduit OFCs: jurisdictions through which a disproportionate amount of value moves toward Sink OFCs (e.g. the corporate–focused
tax haven
A tax is a compulsory financial charge or some other type of levy imposed on a taxpayer (an individual or legal entity) by a governmental organization in order to fund government spending and various public expenditures (regional, local, or n ...
s)
(Conduits are: Netherlands, United Kingdom, Switzerland, Singapore and Ireland)
Sink OFCs rely on Conduit OFCs to re–route funds from high–tax locations using
base erosion and profit shifting
Base erosion and profit shifting (BEPS) refers to corporate tax planning strategies used by multinationals to "shift" profits from higher-tax jurisdictions to lower-tax jurisdictions or no-tax locations where there is little or no economic ...
("BEPS") tax planning tools, which are encoded, and accepted, in the Conduit OFC's extensive networks of global bilateral
tax treaties. Because Sink OFCs are more closely associated with traditional tax havens, they tend to have more limited treaty networks and access to global higher–tax locations.
Rankings
Prior to the 1960s, there was little data available to rank financial centres.
In recent years many rankings have been developed and published. Two of the most relevant are the ''Global Financial Centres Index'' and the ''Xinhua–Dow Jones International Financial Centres Development Index''.
Global Financial Centres Index (2007–ongoing)
The Global Financial Centres Index ("GFCI") is compiled semi-annually by the
London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
-based think tank
Z/Yen
Z/Yen is a commercial think-tank, consultancy and venture firm headquartered in the City of London. It works in the financial services, technology and voluntary sectors on research, performance review and strategic management. Founded in 1994, ...
in conjunction with the
Shenzhen
Shenzhen (; ; ; ), also historically known as Sham Chun, is a major sub-provincial city and one of the special economic zones of China. The city is located on the east bank of the Pearl River estuary on the central coast of southern province ...
-based think tank
China Development Institute
China Development Institute (CDI) is a China-based think tank headquartered in Shenzhen, Guangdong, bordering Hong Kong. It was founded in 1989 to support the Chinese economic reform. CDI is also tasked with expanding international academic exchang ...
.
As of 24 March 2022, the top global financial centres per the
GFCI
A residual-current device (RCD), residual-current circuit breaker (RCCB) or ground fault circuit interrupter (GFCI) is an electrical safety device that quickly breaks an electrical circuit with leakage current to ground. It is to protect equip ...
article containing a ranked list of 119 financial centres were:
Xinhua–Dow Jones Index (2010–2014)
![Skyline Frankfurt am Main 2015](https://upload.wikimedia.org/wikipedia/commons/d/d7/Skyline_Frankfurt_am_Main_2015.jpg)
The Xinhua–Dow Jones International Financial Centers Development Index was compiled annually by the
Xinhua News Agency
Xinhua News Agency (English pronunciation: )J. C. Wells: Longman Pronunciation Dictionary, 3rd ed., for both British and American English, or New China News Agency, is the official state news agency of the People's Republic of China. Xinhua ...
of China with the
Chicago Mercantile Exchange and
Dow Jones & Company of the United States from 2010 to 2014. During that time New York was the top-ranked centre.
According to the 2014 Xinhua–Dow Jones International Financial Centres Development Index (IFCD), the top ten financial centres in the world were:
(Δ) Appears on the FSF–IMF
Offshore Financial Centre (OFC) Lists.
(†) Also appears as one of the top 5
Conduit OFC, in CORPNET's 2017 research; or
(‡) Also appears as one of the top 5
Sink OFC, in CORPNET's 2017 research.
Examples
Old finance centres such as Amsterdam, London, Paris, and New York
have long histories.
Today there is a diverse range of financial centres worldwide. While New York and London often stand out as the leading global financial centres,
other established financial centres provide significant competition and several newer financial centres are developing. Despite this proliferation of financial centres, academics have discussed evidence showing increasing concentration of financial activity in the largest national and international financial centres in the 21st century.
Others have discussed the ongoing dominance of New York and London, and the role linkages between these two financial centres played in the
financial crisis of 2007–08
Finance is the study and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of f ...
.
Comparisons of financial centres focus on their history, role and significance in serving national, regional and international financial activity. Each centre's offering includes differing legal, tax and regulatory environments.
One journalist suggested three factors for success as a financial city: "a pool of capital to lend or invest; a decent legal and taxation framework; and high-quality human resources".
Major IMF IFCs
New York, London, and Tokyo are in every list of major IFCs. Some of the major RFCs (see below), such as Paris, Frankfurt, Chicago, and Shanghai appear as IFCs in some lists.
![Photos NewYork1 032](https://upload.wikimedia.org/wikipedia/commons/f/f5/Photos_NewYork1_032.jpg)
* New York City.
Since the middle of the 20th century, New York City, represented by
Wall Street in Manhattan's
Financial District
A financial district is usually a central area in a city where financial services firms such as banks, insurance companies and other related finance corporations have their head offices. In major cities, financial districts are often home to s ...
, has been described as a leading financial centre.
Over the past few decades, with the rise of a multipolar world
Polarity in international relations is any of the various ways in which power is distributed within the international system. It describes the nature of the international system at any given period of time. One generally distinguishes three types o ...
with new regional powers and global capitalism
Capitalism is an economic system based on the private ownership of the means of production and their operation for profit. Central characteristics of capitalism include capital accumulation, competitive markets, price system, priva ...
, numerous financial centres have challenged Wall Street, particularly London and several in Asia, which some analysts believe will be the focus of new worldwide growth. One source described New York as extending its lead as the world's centre of finance in September 2018; according to Reuters
Reuters ( ) is a news agency owned by Thomson Reuters Corporation. It employs around 2,500 journalists and 600 photojournalists in about 200 locations worldwide. Reuters is one of the largest news agencies in the world.
The agency was esta ...
, the think-tank
A think tank, or policy institute, is a research institute that performs research and advocacy concerning topics such as social policy, political strategy, economics, military, technology, and culture. Most think tanks are non-governmental ...
''New Financial'' concluded the "raw" value of domestic and international financial activity like managing assets and issuing equity underscored the position of New York as the world's leading financial centre.
:New York City remains the largest centre for trading in public equity
A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange (list ...
and debt
Debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase. The ...
capital markets
A capital market is a financial market in which long-term debt (over a year) or equity-backed securities are bought and sold, in contrast to a money market where short-term debt is bought and sold. Capital markets channel the wealth of savers ...
, driven in part by the size and financial development of the U.S. economy. The NYSE
The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
and NASDAQ are the two largest stock exchanges in the world. New York also leads in hedge fund
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as s ...
management; private equity
In the field of finance, the term private equity (PE) refers to investment funds, usually limited partnerships (LP), which buy and restructure financially weak companies that produce goods and provide services. A private-equity fund is both a t ...
; and the monetary volume of mergers and acquisitions
Mergers and acquisitions (M&A) are business transactions in which the ownership of companies, other business organizations, or their operating units are transferred to or consolidated with another company or business organization. As an aspect ...
. Several investment banks
Investment banking pertains to certain activities of a financial services company or a corporate division that consist in advisory-based financial transactions on behalf of individuals, corporations, and governments. Traditionally associated wit ...
and investment managers
Investment management is the professional asset management of various securities, including shareholdings, bonds, and other assets, such as real estate, to meet specified investment goals for the benefit of investors. Investors may be institut ...
headquartered in New York City are important participants in other financial centres. The New York Federal Reserve Bank, the largest within the Federal Reserve System
The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after a ...
, regulates financial institutions and implements U.S. monetary policy, which in turn influences the world's economy. The three major global credit rating agencies
A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's ability to pay back debt by making timely principal and interest payments and the likelihood of default. An agency may ra ...
– Standard and Poor's
S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency (CRA) and a division of S&P Global that publishes financial research and analysis on stocks, bonds, and commodities. S&P is cons ...
, Moody's Investor Service, and Fitch Ratings
Fitch Ratings Inc. is an American credit rating agency and is one of the " Big Three credit rating agencies", the other two being Moody's and Standard & Poor's. It is one of the three nationally recognized statistical rating organizations ( NRSRO ...
– are headquartered or co–headquartered in New York City, with Fitch being co–headquartered in London.
* London. London has been a leading international financial centre since the 19th century, acting as a centre of lending and investment around the world. English contract law was adopted widely for international finance
International finance (also referred to as international monetary economics or international macroeconomics) is the branch of financial economics broadly concerned with monetary and macroeconomic interrelations between two or more countries. Inter ...
, with legal services provided in London. Financial institutions located there provided services internationally such as Lloyd's of London
Lloyd's of London, generally known simply as Lloyd's, is an insurance and reinsurance market located in London, England. Unlike most of its competitors in the industry, it is not an insurance company; rather, Lloyd's is a corporate body gove ...
(founded 1686) for insurance and the Baltic Exchange
The Baltic Exchange (incorporated as The Baltic Exchange Limited) is a membership organisation for the maritime industry, and freight market information provider for the trading and settlement of physical and derivative contracts. It was locate ...
(founded 1744) for shipping. During the 20th century London played an important role in the development of new financial products such as the Eurodollar
Eurodollars are U.S. dollars held in time deposit accounts in banks outside the United States, which thus are not subject to the legal jurisdiction of the U.S. Federal Reserve. Consequently, such deposits are subject to much less regulation than ...
and Eurobonds
Eurobond may refer to:
* Eurobond (external bond)
A eurobond is an international bond that is denominated in a currency not native to the country where it is issued. They are also called external bonds. They are usually categorised according t ...
in the 1960s, international asset management and international equities trading in the 1980s, and derivatives in the 1990s.
:London continues to maintain a leading position as a financial centre in the 21st century, and maintains the largest trade surplus in financial services around the world. However, like New York, it faces new competitors including fast-rising eastern financial centres such as Hong Kong and Shanghai. London is the largest centre for derivatives market
The derivatives market is the financial market for derivatives, financial instruments like futures contracts or options, which are derived from other forms of assets
In financial accounting, an asset is any resource owned or controlled by a ...
s, foreign exchange markets, money market
The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less.
As short-term securities became a commodity, the money market became a compon ...
s, issuance of international debt securities
A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any for ...
, international insurance
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to hedge ...
, trading in gold, silver and base metals through the London bullion market
The London bullion market is a wholesale over-the-counter market for the trading of gold and silver. Trading is conducted amongst members of the London Bullion Market Association (LBMA), loosely overseen by the Bank of England. Most of the member ...
and London Metal Exchange
The London Metal Exchange (LME) is a futures and forwards exchange with the world's largest market in standarised forward contracts, futures contracts and options on base metals. The exchange also offers contracts on ferrous metals and precious ...
, and international bank lending
In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...
. London has the second largest concentration of hedge fund
A hedge fund is a pooled investment fund that trades in relatively liquid assets and is able to make extensive use of more complex trading, portfolio-construction, and risk management techniques in an attempt to improve performance, such as s ...
s (847 according to HedgeLists.com). London benefits from its position between the Asia and U.S. time zones, and benefited from its location within the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
, although this ended on 31 January 2020 when the United Kingdom left the European Union following the Brexit
Brexit (; a portmanteau of "British exit") was the withdrawal of the United Kingdom (UK) from the European Union (EU) at 23:00 GMT on 31 January 2020 (00:00 1 February 2020 CET).The UK also left the European Atomic Energy Community (EAEC ...
referendum of 2016. As well as the London Stock Exchange
London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St P ...
, the Bank of England, the second oldest central bank, is in London, although the European Banking Authority
The European Banking Authority (EBA) is a regulatory agency of the European Union headquartered in Paris. Its activities include conducting stress tests on European banks to increase transparency in the European financial system and identifying ...
moved to Paris after Brexit.
* Tokyo. One report suggests that Japanese authorities are working on plans to transform Tokyo but have met with mixed success, noting that "initial drafts suggest that Japan's economic specialists are having trouble figuring out the secret of the Western financial centres' success." Efforts include more English-speaking restaurants and services and the building of many new office buildings in Tokyo, but more powerful stimuli such as lower taxes have been neglected and a relative aversion to finance remains prevalent in Japan.[ Tokyo emerged as a major financial centre in the 1980s as the Japanese economy became one of the largest in the world.] As a financial centre, Tokyo has good links with New York City and London.
Major IMF OFCs
These centres appear in all FSF–IMF lists of OFCs and, bar the Caribbean OFCs of the Cayman Islands, the British Virgin Islands, and Bermuda, represent all the major OFCs. Some also appear as RFCs in various lists, particularly Hong Kong, and Singapore. They also appear on most lists of major tax havens, and on lists of the largest Conduit and Sink OFCs in the world.
* Amsterdam. Amsterdam is well known for the size of its pension fund market. It is also a centre for banking and trading activities. Amsterdam was a prominent financial centre in Europe in the 17th and 18th centuries and several of the innovations developed there were transported to London. In June 2017, a study published in ''Nature
Nature, in the broadest sense, is the physical world or universe. "Nature" can refer to the phenomena of the physical world, and also to life in general. The study of nature is a large, if not the only, part of science. Although humans are ...
'' ranked the Netherlands as the world's largest Conduit OFC, a term use to describe the re-routing of fund flows to tax havens. Additionally, after the UK's departure from the European Union, Amsterdam became Europe’s largest share trading centre.
* Dublin. Dublin (via its International Financial Services Centre
The International Financial Services Centre (IFSC) is an area of central Dublin and part of the CBD established in the 1980s as an urban regeneration area and special economic zone (SEZ) on the derelict state-owned former port authority lan ...
, "IFSC"), is a specialised financial services centre with a focus on fund administration and domiciling, fund management, custodial activities and aircraft leasing. It is the largest securitisation location in the EU-27, and the second largest domicile for investment funds, particularly alternative investment funds, after Luxembourg. Many of the funds domiciled and managed in Dublin are at the instruction of investment managers in larger Asset Management jurisdictions such as London, Frankfurt, New York and Luxembourg.[ Dublin's advanced BEPS tax tools, for example the ]double Irish
The Double Irish arrangement was a base erosion and profit shifting (BEPS) corporate tax avoidance tool used mostly by United States multinationals since the late 1980s to avoid corporate taxation on non-U.S. profits. It was the largest tax ...
, the single malt, and the capital allowances for intangible assets ("CAIA") tools, have led the economist Gabriel Zucman
Gabriel Zucman (born 30 October 1986) is a French economist who is currently an associate professor of public policy and economics at the University of California, Berkeley‘s Goldman School of Public Policy. The author of '' The Hidden Wealth o ...
to judge Ireland to be the largest corporate tax haven by virtue of its use as a conduit OFC.
* Hong Kong. As a financial centre, Hong Kong has strong links with London and New York City. It developed its financial services industry while a British territory and its present legal system, defined in Hong Kong Basic Law
The Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China is a national law of China that serves as the organic law for the Hong Kong Special Administrative Region (HKSAR). Comprising nine chapters, 160 ...
, is based on English law. In 1997, Hong Kong became a , retaining its laws and a high degree of autonomy for at least 50 years after the transfer. Recently, this formula has been threatened by interference of the Chinese central government (see also Hong Kong national security law
The Hong Kong national security law, officially the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region, is a piece of national security legislation concerning Hong Kong. It ...
and 2019 Hong Kong extradition bill
The Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019 () was a proposed bill regarding extradition to amend the Fugitive Offenders Ordinance () in relation to special surrender arrangements a ...
). Most of the world's 100 largest banks have a presence in the city. Hong Kong is a leading location for initial public offerings
An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investment ...
, competing with New York City, and also for merger and acquisition activity.
* Luxembourg. Luxembourg is a specialised financial services centre that is the largest location for investment fund domiciliation in Europe, and second in the world after the United States. Many of the funds domiciled in Luxembourg are managed in London.[ Luxembourg is the leading private banking centre in the ]Eurozone
The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro ( €) as their primary currency and sole legal tender, and have thus fully implemented EMU polici ...
and the largest captive
Captive or Captives may refer to:
Arts, entertainment, and media Films
* ''Captive'' (1980 film), a sci-fi film, starring Cameron Mitchell and David Ladd
* ''Captive'' (1986 film), a British-French film starring Oliver Reed
* ''Captive'' (1991 ...
reinsurance centre in Europe. 143 banks from 28 countries are established in Luxembourg. The country is also the third largest renminbi centre in the world by numbers, in certain activities such as deposits, loans, bond listing and investment funds. Three of the largest Chinese banks have their European hub in Luxembourg (ICBC
Industrial and Commercial Bank of China Limited (ICBC; ) is a Chinese multinational bank.
Founded as a limited company on 1 January 1984, ICBC is a state-owned commercial bank. With capital provided by the Ministry of Finance of China, the b ...
, Bank of China
The Bank of China (BOC; ) is a Chinese majority state-owned commercial bank headquartered in Beijing and the fourth largest bank in the world.
The Bank of China was founded in 1912 by the Republican government as China's central bank, repl ...
, China Construction Bank
China Construction Bank Corporation (CCB) is one of the " big four" banks in China. In 2015, CCB was the 2nd largest bank in the world by market capitalization and 6th largest company in the world. The bank has approximately 13,629 domestic branc ...
).
* Singapore. With its strong links with London, Singapore has developed into the Asia region's largest centre for foreign exchange and commodity trading, as well as a growing wealth management hub. Other than Tokyo, it is one of the main centres for fixed income trading in Asia. However, the market capitalisation of its stock exchange has been falling since 2014 and several major companies plan to delist.
* Zurich. Zurich is a significant centre for banking, asset management including provision of alternative investment products, and insurance. Since Switzerland is not a member of the European Union
The European Union (EU) is a supranational political and economic union of member states that are located primarily in Europe. The union has a total area of and an estimated total population of about 447million. The EU has often been de ...
, Zurich is not directly subject to EU regulation.
Major IMF RFCs
In some lists, RFCs such as Paris, Frankfurt, Chicago, and Shanghai appear as IFCs, however, they do not appear in all lists. They are certainly major RFCs.
* Chicago. The Illinois
Illinois ( ) is a state in the Midwestern United States. Its largest metropolitan areas include the Chicago metropolitan area, and the Metro East section, of Greater St. Louis. Other smaller metropolitan areas include, Peoria and Rockf ...
city has the "world’s largest xchange-tradedderivatives market" since the Chicago Mercantile Exchange and the Chicago Board of Trade merged in 2007, under the CME Group.
* Dubai. The second largest emirate in the United Arab Emirates
The United Arab Emirates (UAE; ar, اَلْإِمَارَات الْعَرَبِيَة الْمُتَحِدَة ), or simply the Emirates ( ar, الِْإمَارَات ), is a country in Western Asia ( The Middle East). It is located at t ...
is a growing centre for finance in the Middle East
The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabia (including the Arabian Peninsula and Bahrain), Asia Minor (Asian part of Turkey except Hatay Province), East Thrace (Europ ...
, including for Islamic finance
Islamic banking, Islamic finance ( ar, مصرفية إسلامية), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economic ...
. Its emergence as a financial centre is relatively recent, although commercial banking activity in the UAE became established in the second half of the 20th century (the first commercial bank in Dubai was British Bank of the Middle East in 1946, and the first domestic commercial bank was the National Bank of Dubai established in 1963).
* Frankfurt. Frankfurt attracts many foreign banks which maintain offices in the city. It is the seat of Deutsche Börse
Deutsche Börse AG () or the Deutsche Börse Group, is a German company offering marketplace organizing for the trading of shares and other securities. It is also a transaction services provider. It gives companies and investors access to gl ...
, one of the leading stock exchanges and derivatives markets operators, and the European Central Bank
The European Central Bank (ECB) is the prime component of the monetary Eurosystem and the European System of Central Banks (ESCB) as well as one of seven institutions of the European Union. It is one of the world's most important centr ...
, which sets the monetary policy for the single European currency, the euro
The euro ( symbol: €; code: EUR) is the official currency of 19 out of the member states of the European Union (EU). This group of states is known as the eurozone or, officially, the euro area, and includes about 340 million citizens . ...
; in addition, in 2014 the European Central Bank took over responsibility for banking supervision for the 18 countries which form the Eurozone
The euro area, commonly called eurozone (EZ), is a currency union of 19 member states of the European Union (EU) that have adopted the euro ( €) as their primary currency and sole legal tender, and have thus fully implemented EMU polici ...
. It is also the seat of Deutsche Bundesbank, the German central bank, as well as of EIOPA, the EU's supervisory authority for insurances and occupational pension systems.
:Frankfurt has been the financial centre of Germany since the second half of the 20th century as it was before the mid-19th century. Berlin held the position during the intervening period, focusing on lending to European countries while London focused on lending to the Americas and Asia.
* Madrid. Madrid is the headquarters to the Spanish company Bolsas y Mercados Españoles, which owns the four stock exchanges in Spain, the largest being the Bolsa de Madrid
Bolsa de Madrid (; Madrid Stock Exchange) is the largest and most international of Spain's four regional stock exchanges (the others are located in Barcelona, Valencia, and Bilbao) that trade shares and convertible bonds and fixed income securiti ...
. Trading of equities, derivatives and fixed income securities are linked through the Madrid-based electronic Spanish Stock Market Interconnection System (SIBE), handling more than 90% of all financial transactions. Madrid ranks fourth in European equities market capitalisation, and Madrid's stock exchange is second in terms of number of listed companies, just behind New York Stock Exchange (NYSE plus NASDAQ). As a financial centre, Madrid has extensive links with Latin America
Latin America or
* french: Amérique Latine, link=no
* ht, Amerik Latin, link=no
* pt, América Latina, link=no, name=a, sometimes referred to as LatAm is a large cultural region in the Americas where Romance languages — languages derived f ...
and acts as a gateway for many Latin American financial firms to access the EU banking and financial markets.
* Milan. Italy's main centre of banking and finance. It hosts the Borsa Italiana stock exchange, one of the larger stock exchanges in Europe, which is now part of Euronext
Euronext N.V. (short for European New Exchange Technology) is a pan-European bourse that offers various trading and post-trade services.
Traded assets include regulated equities, exchange-traded funds (ETF), warrants and certificates, bonds, ...
.
* Paris. Alongside equity trading on the Paris Stock Exchange, there is futures and options trading, insurance, corporate banking and asset management taking place in Paris. The city is home to the Banque de France
The Bank of France ( French: ''Banque de France''), headquartered in Paris, is the central bank of France. Founded in 1800, it began as a private institution for managing state debts and issuing notes. It is responsible for the accounts of the ...
and the European Securities and Markets Authority
The European Securities and Markets Authority (ESMA) is an independent European Union Authority located in Paris.
ESMA replaced the Committee of European Securities Regulators (CESR) on 1 January 2011. It is one of the three new European Sup ...
. Paris has been a major financial centre since the 19th century. The European Banking Authority
The European Banking Authority (EBA) is a regulatory agency of the European Union headquartered in Paris. Its activities include conducting stress tests on European banks to increase transparency in the European financial system and identifying ...
is also moving to Paris in March 2019 following Brexit.
* Seoul. South Korea
South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korean Peninsula and sharing a land border with North Korea. Its western border is formed by the Yellow Sea, while its eas ...
's capital has developed significantly as a financial centre since the late-2000s recession. In 2009, Seoul ranked 53rd among global financial centres; by 2012, Seoul had risen to number 9. Seoul has continued to build office space with the completion of the International Financial Center Seoul
International Finance Center Seoul (서울국제금융센터), commonly known as IFC Seoul (아이 에프 시 서울), is a mixed-use integrated commercial development in Seoul, South Korea. It is located in Yeouido-dong, Yeongdeungpo-gu, Seoul, ...
in 2013. It ranked 7th in the 2015 Global Financial Centres Index
The Global Financial Centres Index (GFCI) is a ranking of the competitiveness of financial centres based on over 29,000 financial centre assessments from an online questionnaire together with over 100 indices from organisations such as the World ...
, recording the highest growth in rating among the top ten cities.
* Shanghai. Official efforts have been directed to making Pudong
Pudong is a district of Shanghai located east of the Huangpu, the river which flows through central Shanghai. The name ''Pudong'' was originally applied to the Huangpu's east bank, directly across from the west bank or Puxi, the historic cit ...
a financial leader by 2010. Efforts during the 1990s were mixed, but in the early 21st century, Shanghai gained ground. Factors such as a "protective banking sector" and a "highly restricted capital market" have held the city back, according to a 2009 opinion piece in ''China Daily
''China Daily'' () is an English-language daily newspaper owned by the Central Propaganda Department of the Chinese Communist Party.
Overview
''China Daily'' has the widest print circulation of any English-language newspaper in China. T ...
''. Shanghai has done well in terms of market capitalisation but it needs to "attract an army of money managers, lawyers, accountants, actuaries, brokers and other professionals, Chinese and foreign" to enable it to compete with New York and London. China is generating tremendous new capital, which makes it easier to stage initial public offerings of state-owned companies in places like Shanghai.
* Sydney. Australia's most populous city is a financial and business services hub not only for Australia but for the Asia-Pacific region. Sydney competes quite closely with other Asia Pacific hubs, however it concentrates a greater portion of Australian-based business in terms of clients and services. Sydney is home to two of Australia's four largest banks, the Commonwealth Bank of Australia and Westpac Banking Corporation, both headquartered in the Sydney CBD. Sydney is also home to 12 of the top 15 asset managers in Australia. Melbourne, on the other hand, tends to concentrate more of the Australian superannuation funds (pension funds). Sydney is using the large Barangaroo development project on its harbour to further position itself as an Asian Pacific hub. Sydney is also home to the Australian Securities Exchange and an array of brokerage banks which are either headquartered or regionally based in Sydney, including Australia's largest investment bank Macquarie Group.
* Toronto. The city is a leading market for Canada's largest financial institutions and large insurance companies. It has also become one of the fastest growing financial centres following the late-2000s recession, helped by the stability of the Canadian banking system. Most of the financial industry is concentrated along Bay Street
Bay Street is a major thoroughfare in Downtown Toronto, Ontario, Canada. It is the centre of Toronto's Financial District and is often used by metonymy to refer to Canada's financial services industry since succeeding Montreal's St. James Stre ...
, where the Toronto Stock Exchange
The Toronto Stock Exchange (TSX; french: Bourse de Toronto) is a stock exchange located in Toronto, Ontario, Canada. It is the 10th largest exchange in the world and the third largest in North America based on market capitalization. Based in the ...
is also located.
* Others. Mumbai
Mumbai (, ; also known as Bombay — List of renamed Indian cities and states#Maharashtra, the official name until 1995) is the capital city of the Indian States and union territories of India, state of Maharashtra and the ''de facto'' fin ...
is an emerging financial centre, which also provides international support services to London and other financial centres. Cities such as São Paulo
São Paulo (, ; Portuguese for ' Saint Paul') is the most populous city in Brazil, and is the capital of the state of São Paulo, the most populous and wealthiest Brazilian state, located in the country's Southeast Region. Listed by the Ga ...
, Mexico City
Mexico City ( es, link=no, Ciudad de México, ; abbr.: CDMX; Nahuatl: ''Altepetl Mexico'') is the capital city, capital and primate city, largest city of Mexico, and the List of North American cities by population, most populous city in North Amer ...
and Johannesburg
Johannesburg ( , , ; Zulu and xh, eGoli ), colloquially known as Jozi, Joburg, or "The City of Gold", is the largest city in South Africa, classified as a megacity, and is one of the 100 largest urban areas in the world. According to Dem ...
and other "would-be hubs" lack liquidity and the "skills base", according to one source.[ Financial industries in countries and regions such as the ]Indian subcontinent
The Indian subcontinent is a list of the physiographic regions of the world, physiographical region in United Nations geoscheme for Asia#Southern Asia, Southern Asia. It is situated on the Indian Plate, projecting southwards into the Indian O ...
and Malaysia
Malaysia ( ; ) is a country in Southeast Asia. The federation, federal constitutional monarchy consists of States and federal territories of Malaysia, thirteen states and three federal territories, separated by the South China Sea into two r ...
require not only well-trained people but the "whole institutional infrastructure of laws, regulations, contracts, trust and disclosure" which takes time to happen.[
]
History
Primitive financial centres started in the 11th century in the Kingdom of England
The Kingdom of England (, ) was a sovereign state on the island of Great Britain from 12 July 927, when it emerged from various History of Anglo-Saxon England, Anglo-Saxon kingdoms, until 1 May 1707, when it united with Kingdom of Scotland, ...
at the annual fair of St. Giles and in the Kingdom of Germany
The Kingdom of Germany or German Kingdom ( la, regnum Teutonicorum "kingdom of the Germans", "German kingdom", "kingdom of Germany") was the mostly Germanic-speaking East Frankish kingdom, which was formed by the Treaty of Verdun in 843, especi ...
at the Frankfurt autumn fair, then developed in medieval France
The Kingdom of France in the Middle Ages (roughly, from the 10th century to the middle of the 15th century) was marked by the fragmentation of the Carolingian Empire and West Francia (843–987); the expansion of royal control by the House of ...
during the Champaign Fairs.[
]
Italian ''city-states''
The first real international financial centre was the City State of Venice
Venice ( ; it, Venezia ; vec, Venesia or ) is a city in northeastern Italy and the capital of the Veneto region. It is built on a group of 118 small islands that are separated by canals and linked by over 400 bridges. The isla ...
which slowly emerged from the 9th century to its peak in the 14th century.[ Tradable bonds as a commonly used type of security, were invented by the Italian city-states (such as Venice and ]Genoa
Genoa ( ; it, Genova ; lij, Zêna ). is the capital of the Italian region of Liguria and the sixth-largest city in Italy. In 2015, 594,733 people lived within the city's administrative limits. As of the 2011 Italian census, the Province of ...
) of the late medieval
In the history of Europe, the Middle Ages or medieval period lasted approximately from the late 5th to the late 15th centuries, similar to the post-classical period of global history. It began with the fall of the Western Roman Empire ...
and early Renaissance
The Renaissance ( , ) , from , with the same meanings. is a period in European history
The history of Europe is traditionally divided into four time periods: prehistoric Europe (prior to about 800 BC), classical antiquity (800 BC to AD ...
periods while Florence
Florence ( ; it, Firenze ) is a city in Central Italy and the capital city of the Tuscany Regions of Italy, region. It is the most populated city in Tuscany, with 383,083 inhabitants in 2016, and over 1,520,000 in its metropolitan area.Bilan ...
can be said to be the birthplace of double-entry bookkeeping
Double-entry bookkeeping, also known as double-entry accounting, is a method of bookkeeping that relies on a two-sided accounting entry to maintain financial information. Every entry to an account requires a corresponding and opposite entry t ...
from the publication and proliferation of the work of Luca Pacioli.
The Low Countries
In the sixteenth century, the overall economic supremacy of the Italian city-states gradually waned, and the centre of financial activities in Europe shifted to the Low Countries
The term Low Countries, also known as the Low Lands ( nl, de Lage Landen, french: les Pays-Bas, lb, déi Niddereg Lännereien) and historically called the Netherlands ( nl, de Nederlanden), Flanders, or Belgica, is a coastal lowland region in N ...
, first to Bruges
Bruges ( , nl, Brugge ) is the capital and largest city of the province of West Flanders in the Flemish Region of Belgium, in the northwest of the country, and the sixth-largest city of the country by population.
The area of the whole city a ...
, and later to Antwerp and Amsterdam
Amsterdam ( , , , lit. ''The Dam on the River Amstel'') is the capital and most populous city of the Netherlands, with The Hague being the seat of government. It has a population of 907,976 within the city proper, 1,558,755 in the urban ar ...
which acted as Entrepôt
An ''entrepôt'' (; ) or transshipment port is a port, city, or trading post where merchandise may be imported, stored, or traded, usually to be exported again. Such cities often sprang up and such ports and trading posts often developed into c ...
cities. They also became important centres of financial innovation, capital accumulation and investment. By the early 1800s, London
London is the capital and List of urban areas in the United Kingdom, largest city of England and the United Kingdom, with a population of just under 9 million. It stands on the River Thames in south-east England at the head of a estuary dow ...
officially replaced Amsterdam as the world's leading financial centre.
19th–21st centuries
London and Paris
Paris () is the Capital city, capital and List of communes in France with over 20,000 inhabitants, most populous city of France, with an estimated population of 2,165,423 residents in 2019 in an area of more than 105 km² (41 sq mi), ma ...
were the world's only prominent financial centres throughout most of the 19th century. After 1870, Berlin
Berlin ( , ) is the capital and List of cities in Germany by population, largest city of Germany by both area and population. Its 3.7 million inhabitants make it the European Union's List of cities in the European Union by population within ci ...
and New York grew to become major financial centres mainly serving their national economies. An array of smaller international financial centres found market niches, such as Amsterdam, Brussels
Brussels (french: Bruxelles or ; nl, Brussel ), officially the Brussels-Capital Region (All text and all but one graphic show the English name as Brussels-Capital Region.) (french: link=no, Région de Bruxelles-Capitale; nl, link=no, Bruss ...
, Zurich, and Geneva
, neighboring_municipalities= Carouge, Chêne-Bougeries, Cologny, Lancy, Grand-Saconnex, Pregny-Chambésy, Vernier, Veyrier
, website = https://www.geneve.ch/
Geneva ( ; french: Genève ) frp, Genèva ; german: link=no, Genf ; it, Ginevr ...
. London was the leading international financial centre in the four decades before World War I
World War I (28 July 1914 11 November 1918), often abbreviated as WWI, was one of the deadliest global conflicts in history. Belligerents included much of Europe, the Russian Empire, the United States, and the Ottoman Empire, with fightin ...
. Since then, New York and London have developed leading positions in different activities and some non-Western financial centres have grown in prominence, notably Tokyo
Tokyo (; ja, 東京, , ), officially the Tokyo Metropolis ( ja, 東京都, label=none, ), is the capital and List of cities in Japan, largest city of Japan. Formerly known as Edo, its metropolitan area () is the most populous in the world, ...
, Hong Kong
Hong Kong ( (US) or (UK); , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (abbr. Hong Kong SAR or HKSAR), is a city and special administrative region of China on the eastern Pearl River Delta i ...
, Singapore
Singapore (), officially the Republic of Singapore, is a sovereign island country and city-state in maritime Southeast Asia. It lies about one degree of latitude () north of the equator, off the southern tip of the Malay Peninsula, bor ...
and Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...
.
Rise of London
Rise of New York
Rise of Asian centres
In Asia
Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an are ...
, Tokyo emerged as a major financial centre in the 1980s as the Japanese economy became one of the largest in the world. Hong Kong and Singapore developed soon after leveraging their links with London and Britain.[ In the 21st century, other centres have grown including Toronto, Sydney, Seoul, Shanghai and ]Astana
Astana, previously known as Akmolinsk, Tselinograd, Akmola, and most recently Nur-Sultan, is the capital city of Kazakhstan.
The city lies on the banks of the Ishim River in the north-central part of Kazakhstan, within the Akmola Region, tho ...
. Astana International Financial Centre
The Astana International Financial Centre (AIFC) is a financial hub in Astana, Kazakhstan that officially launched on July 5, 2018.
On 20 May 2015, the President of Republic of Kazakhstan Nursultan Nazarbayev announced the “100 Concrete Steps ...
has become the fastest growing financial hub in Central Asia. Dubai has become a centre for finance in the Middle East
The Middle East ( ar, الشرق الأوسط, ISO 233: ) is a geopolitical region commonly encompassing Arabia (including the Arabian Peninsula and Bahrain), Asia Minor (Asian part of Turkey except Hatay Province), East Thrace (Europ ...
, including for Islamic finance
Islamic banking, Islamic finance ( ar, مصرفية إسلامية), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economic ...
. The rapid rise of India
India, officially the Republic of India (Hindi: ), is a country in South Asia. It is the seventh-largest country by area, the second-most populous country, and the most populous democracy in the world. Bounded by the Indian Ocean on the so ...
has enabled Mumbai to become an emerging financial centre. India is also making an International Financial Centre GIFT City
Gujarat International Finance Tec-City (GIFT City) is central business district under-construction in Gandhinagar and Ahmedabad in Gandhinagar district in Gujarat, India. It is India's first operational greenfield smart city and internatio ...
from scratch. GIFT city is now functional and has already won the crown of fastest emerging International Finance Centre of South Asia. Linked to the rise of these new IFCs, has seen the rise of "partner OFCs" (offshore tax-havens to which funds are routed), such as Taiwan (a major Sink OFC for Asia, and 7th largest global Sink OFC), Mauritius (a major Sink OFC for South Asia, especially India, and Africa, and the 9th largest global Sink OFC).
The private nationwide financial system in China was first developed by the Shanxi merchants, with the creation of so-called "draft banks". The first draft bank Rishengchang was created in 1823 in Pingyao. Some large draft banks had branches in Russia, Mongolia and Japan to facilitate the international trade. Throughout the nineteenth century, the central Shanxi region became the de facto financial centres of Qing China. With the fall of Qing Dynasty, the financial centres gradually shifted to Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...
, mainly due to its geographical location at the estuary of the Yangtze River
The Yangtze or Yangzi ( or ; ) is the longest list of rivers of Asia, river in Asia, the list of rivers by length, third-longest in the world, and the longest in the world to flow entirely within one country. It rises at Jari Hill in th ...
and to the control of customs in China. After the establishment of People's Republic of China, the financial centres in China today are Beijing
}
Beijing ( ; ; ), alternatively romanized as Peking ( ), is the capital of the People's Republic of China. It is the center of power and development of the country. Beijing is the world's most populous national capital city, with over 21 ...
, Shanghai
Shanghai (; , , Standard Mandarin pronunciation: ) is one of the four direct-administered municipalities of the People's Republic of China (PRC). The city is located on the southern estuary of the Yangtze River, with the Huangpu River flowin ...
, and Shenzhen
Shenzhen (; ; ; ), also historically known as Sham Chun, is a major sub-provincial city and one of the special economic zones of China. The city is located on the east bank of the Pearl River estuary on the central coast of southern province ...
.
See also
* Global city
* Corporate tax haven
Corporate haven, corporate tax haven, or multinational tax haven is used to describe a jurisdiction that multinational corporations find attractive for establishing subsidiaries or incorporation of regional or main company headquarters, mostly du ...
* Financial capital
Financial capital (also simply known as capital or equity in finance, accounting and economics) is any economic resource measured in terms of money used by entrepreneurs and businesses to buy what they need to make their products or to provi ...
* Financial Development Index The World Economic Forum publishes a Financial Development Index annually, which measures and analyses the factors enabling the development of financial systems among different economies
An economy is an area of the production, distribution an ...
* Geography of finance
* Global financial system
The global financial system is the worldwide framework of legal agreements, institutions, and both formal and informal economic actors that together facilitate international flows of financial capital for purposes of investment and trade finan ...
* Nylonkong
Nylonkong, a contraction of New York–London–Hong Kong, is a neologism coined to link New York City, London, and Hong Kong as the ecumenopolis of the Americas, Euro-Africa, and Asia-Pacific that first appeared in the magazine ''Time'' ...
* Conduit and Sink OFCs
* Financial district
A financial district is usually a central area in a city where financial services firms such as banks, insurance companies and other related finance corporations have their head offices. In major cities, financial districts are often home to s ...
Notes
References
External links
International Financial Centres
– news articles from ''The Banker'' magazine.
Financial Centres International
– a forum on developments in international financial services centres.
– research on global financial centres from the '' Z/Yen Group''.
{{DEFAULTSORT:Centre
International finance
Offshore finance
Foreign exchange market