London and New York have tightened their grip on their status as the only true global financial centres, according to a new survey from the Corporation of London

The study examines financial services industry players’ perceptions of four leading financial centres: London; New York; Frankfurt; and Paris. It found that London and New York score well above Paris and Frankfurt, but that the difference between London and New York is not statistically significant.

It concludes that London and New York are the only two genuinely global financial centres at present, and that other financial centres such as Frankfurt, Paris and most of the Asian centres will remain as national financial centres and will not challenge London and New York as global financial centres in the future.

“Part of the continuing appeal of London to foreign companies is its cosmopolitan status,” the report noted. “Frankfurt and Tokyo, for example, are primarily market places for domestic participants to which foreign players are granted access. London, and to a lesser extent, New York are characterised by foreigners trading with each other. In an increasingly international economy, London seems to have a solid future as a global financial centre.”

If a third financial centre does arise, it’s expected to happen in China, probably in Shanghai. “It is unlikely that Hong Kong, Singapore or Tokyo will ever become more than regional financial centres,” it finds.

The availability of skilled personnel is clearly judged as the most important factor in developing a financial centre, and the regulatory environment is also seen as a crucial component of competitiveness. Looking ahead, it found that government responsiveness, and the corporate and personal tax regimes are likely to be of greater concern over the next three years.

The report notes that an argument has been made that financial centres will be weakened by technology, outsourcing and off-shoring. However, it finds that financial centres may lose certain types of commoditized activities to low cost cities but the important parts of the industry, companies’ headquarters and their most skilled employees will continue to cluster in financial centres.

“It would appear that the ‘value-added’ activities will remain in the business clusters that financial centres offer. These value added activities include senior ‘strategic’ management and front office, product innovation, client facing and deal-making activities,” it says.

http://www.cityoflondon.gov.uk/Corporation/business_city/research_statistics/research_publications.htm