2013

GFCI 13 provides profiles, rating and rankings for 79 financial centres, drawing on two separate sources of data - instrumental factors (external indices) and responses to an online survey. 96 factors have been used in GFCI 13, of which 40 have been updated since GFCI 12 and 13 are new. London, New York, Hong Kong and Singapore remain the top four centres, with the last two now only two points apart. In Europe, amidst the turmoil with the Eurozone crisis, Zurich and Geneva confirm their position in the GFCI top 10. In Asia/Pacific, all financial centres except Beijing see their ratings improve. In America, Boston enters the GFCI top 10.

This paper introduces a method, the Internal Growth Rate (IGR), which is accurate, stable and entirely consistent with fair value accounting, though it does not rely on market prices or yields. The authors show that discounting using IGR meets reporting objectives. The many alternatives in current use (risk free rate, Gilts, expected asset return, …) are shown to lead to over or under estimates, bias and volatility. The IGR avoids over or under estimates by considering an element of the system overlooked in current arrangements, contributions. Contributions are primary inputs for the process that delivers the output, pensions. The IGR enables accurate and consistent evaluation of the state of the pension system when applied to the income and expense projections.

2012

86 factors have been used in GFCI 12, of which 37 have been updated since GFCI 11 and 13 are new to the GFCI. GFCI respondents believe that the Asian centres will continue to become more significant in the medium to long term. Some respondents question whether financial centres on mainland China will be able to continue their growth without relaxations in currency controls. Progress is being shown in the Middle East with Qatar, Dubai, Abu Dhabi and Riyadh all seeing rises in both ratings and ranks.

Confidence Accounting is a proposal to use distributions, rather than discrete values, where appropriate in auditing and accounting. In a world of Confidence Accounting, the end results of audits would be presentations of distributions for major entries in the profit & loss, balance sheet and cashflow statements. The proposed benefits of Confidence Accounting include a fairer representation of financial results, reduced footnotes, more measurable audit quality and a mitigation of mark-to-market perturbations.

This Financial Centre Futures report urges asset managers to regain investor confidence by facing up to the moral challenges posed by recent global events. Based on a ‘swift survey’ of asset managers, "Success of the Fittest" assesses the fitness of the asset management sector in the present financial climate. It looks at five key areas impacting the current and future state of the asset management sector, including the macro-economic and industry environments, and the ‘moral issues’ confronting those who work in it.

The past trend of large rises in the ratings of Asia/Pacific centres has paused in GFCI 11 with Hong Kong, Singapore, Tokyo, Shanghai, Beijing, Taipei and Shenzhen all declining. We believe, however, that these results in Asia are just an interlude in the long-term trend of the increasing importance of the region rather than a fundamental change in fortunes. The recent crisis of the Euro has changed the balance of interest within the Eurozone. The capital cities of the weaker Euro economies are clearly suffering. Dublin, Milan, Madrid, Lisbon and Athens were all down in GFCI 10 and this decline has continued in GFCI 11. On the other hand, several offshore financial centres have begun to recover from the reputational damage they have suffered over the past four years.

2011

What might financial services look like in 2050? What might our world look like? Would we want to live in it? Scenario planning provides a challenging set of ideas for those examining the future of the financial services industry and the people it serves. "In Safe Hands?" develops four scenarios in order to consider what our future could be and to understand the implications of possible technological, demographic, geo-political and environmental changes for financial services.

"Don’t Stop Believing" is a sequel to the October 2010 paper "Don’t Stop Thinking about Tomorrow: The Future of Pensions", which considers in detail the position of UK private occupational pensions. This second report considers the specifics of the UK economic position and proposes explicit remedies. Both are a "must read" for policy makers, whether considering state pensions as a means of social welfare or occupational pensions as a means of deferred pay.

GFCI 10 uses 79 factors, of which 34 have been updated and four are new since GFCI 9. There is no significant difference between London, New York and Hong Kong in the ratings and many respondents from our questionnaire continue to believe that these centres work together for mutual benefit. The Nordic and Eastern European centres are now getting very strong support. Centres such as Tallinn (up 118 points in the ratings), Istanbul (up 86 points), Moscow (up 75 points), Helsinki (up 72 points), Copenhagen (up 55 points) and St Petersburg (up 50 points) all demonstrate strong increases in competitiveness.

"The Great Game" offers a unique perspective into the development, growth and sustainability of global financial centres in the post-crisis world. It explains why London and New York became so dominant, why they have been able to maintain their positions and the very real threats they now face.

GFCI 9 reveals that confidence amongst financial services professionals has fallen since GFCI 8, as shown by lower overall ratings – 47 centres have lower ratings in GFCI 9 with only 25 centres rated higher. When questioned about which financial centres are likely to become more significant in the next few years, the top five centres mentioned were all Asian – Shanghai, Singapore, Seoul, Hong Kong and Beijing.

2010

"Don't Stop Thinking About Tomorrow" considers the future of retirement income provision over the long term, predominantly in the context of the UK. The report indicates a number of errors currently being made in the analysis and management of pensions, contributes to the policy debate on some further policy issues and offers several innovations which could enhance the adaptability and resilience of the pension system. The somewhat unconventional view is advanced that pensions, broadly as formerly envisaged, are sustainable over the long-term.

"Time To Stop Betting The House" pulls together the story of the role of mortgages in the financial crisis of 2007/2008. It analyses the situation and presents us with two clear, as well as two quite different, regulatory visions for a more resilient mortgage market. The Edited Choice vision offers borrowers a limited menu of mortgage options, while the Melt the Glue vision aims to create resilience from the ground up. Neither vision is exclusive; both are worthy of discussion and debate.

"In Search of the Eternal Coin" provides a history of the eternal coin. Richard Veryard summarises some of the main themes of the paper: "The eternal coin is an imaginary construct (Cooper calls it a thought experiment), so it's a curious kind of history, retelling the past through the lens of an imagined future. Cooper singles out a number of historical vignettes, which display different elements of a system of value. Cooper’s vignettes can be grouped into four types of economic system, and the coin plays a significantly different role in each."

GFCI 8 is the first publication to come out under the new sponsors of the Financial Centre Futures programme, the Qatar Financial Centre Authority. The Business Environment is still viewed as the key area of competitiveness – it is now mentioned in responses far more often than People or Infrastructure. One of the themes that emerges from GFCI 8 responses is the need for predictability and stability of regulation and taxation. When asked about areas of concern, business professionals state that uncertainty about regulation and tax levels is the issue that worries them the most.

GFCI 7 builds on the approach adopted in GFCI 6, with its increased emphasis on the inter-connectedness of centres, to allow a more in-depth examination of the underpinnings of competitiveness. Whilst the ratings element is retained, there is a new approach to profiling major centres in terms of their linkages within the global financial architecture and the extent and quality of the services that they offer. GFCI 7 demonstrates a return to confidence with 71 of the 75 centres rated receiving higher ratings and only four decreasing.

2009

This 6th edition of GFCI provides ratings and rankings for 75 financial centres, up from 62 in GFCI 5. Of the 75 centres rated, 59 centres have received higher scores and only three have decreased. GFCI 5 demonstrated a ‘flight to safety’ with the top rated centres being less hard hit by the fall in ratings than the bottom centres. The rise in ratings this time is variable, with the change in ratings varying from minus six points (Gibraltar) to plus 135 (Beijing) with an average movement of plus 43 points. The large rises in ratings were achieved mainly by the Asian centres with Shanghai, Beijing and Seoul all seeing rises in excess of 100 points, as did Sao Paulo, Wellington and Budapest further down the rankings.

In "The Road to Long Finance", co-authors Michael Mainelli and Bob Giffords argue that only systemic wisdom will provide a long-term solution to the crisis. A return to "business as usual" will leave un-addressed such important problems as ‘too big to fail’; abusive risk-taking; perverse incentives; and a dangerous lack of diversity within the system. Simply tightening the current system of regulation will not work because the crisis was "not a failure of open markets but a failure of highly regulated markets due to unexpected consequences of regulation and private decisions".

GFCI 5 results reflect the severe loss of confidence across all centres. There has been a significant fall in scores for all 62 centres rated here, reflecting a more negative perception of the performance of financial services generally and the effect of the severe downturn in some financial sectors, in particular in investment banks and hedge funds. There is also a much higher degree of uncertainty about the future amongst financial services professionals, demonstrated by a greater degree of volatility in their questionnaire responses regarding current and future competitiveness and success – this is a global crisis with a widespread negative effect on predictability.

2008

In GFCI 4 London remains in the lead in all five areas of competitiveness and also leads in four of the five industry sub-indices. It is striking that New York now leads London in the sub-index based on responses from people working in the Government & Regulatory sector. However, London and New York have both suffered declines in their ratings since GFCI 3 whilst other leading centres have experienced gains. In previous editions of the GFCI the gap between London and New York, and the third place centre was approximately 90 points. In GFCI 4 this gap has decreased to 73.

The top eight centres in GFCI 3 have maintained the same rankings as in GFCI 2. GFCI 3 shows again that London and New York are the two leading global financial centres, some 90 points ahead of the next two centres. Singapore (ranked number 4) is gaining slightly on Hong Kong (ranked number 3), with the gap between those two centres narrowing in GFCI 3 to just 20 points. GFCI 3 contains a special chapter (Chapter 5) focusing on skills in the financial sector, a critical component of competitiveness.

2007

The London Accord first started in 2005 when an informal group of researchers, financial services organisations and investors led by Professor Michael Mainelli came together to discuss how investment research expertise could help inform policy-makers on issues such as climate change. In 2007, the London Accord released the first "open source" research resource both online and with a CD. Reports set out the context for investments in climate change solutions, analysed individual opportunities and discussed the implications for the construction of investment portfolios.

GFCI 2 shows similar findings to GFCI 1, with London edging slightly further ahead of New York. London is seen as remaining foremost in all areas of competitiveness – people, business environment, market access, infrastructure and general competitiveness.

The first report from the biannual index of competitiveness, ranking 46 world financial centres. The first Global Financial Centres Index (GFCI) presented here ranks London and New York as the leading centres, followed by Hong Kong, Singapore and Zurich. London has a narrow lead over New York, but the two together are significantly ahead of the rest of the field to be the only true global financial centres.