Study shows that the US remains a world leader in finance

by Ainsley Ingram June 18, 2023

written by Ainsley Ingram June 18, 2023

[1/2] A Wall Street sign is pictured in front of the New York Stock Exchange in the Manhattan borough of New York City, New York, the United States, April 16, 2021. REUTERS/Carlo Allegri

LONDON, June 10 (Reuters) – The United States remains the world’s dominant financial center, well ahead of nearest rival Britain, whose lead over Frankfurt and Paris so far far outweighs the impact of Brexit, according to a study by think tank New Financial from Thursday .

“Brexit and the potential impact on the City of London has accelerated debate about the relative strengths and weaknesses of different financial centers around the world,” New Financial said.

Its rankings for 65 markets are consistent with similar surveys such as the Z/Yen Group, but New Financial’s focus on actual domestic and international financial activity rather than qualitative factors such as the business and regulatory environment highlights the centers’ catching up ahead.

The United States scored 84 out of 100 overall, more than double the United Kingdom (35), which in turn is almost three times that of France, Germany or Luxembourg.

New financial data from 2016 to 2019.

China is the third largest financial center at 29 points, ahead of Japan (19 points), Hong Kong (14) and France (13), as its huge domestic financial sector offsets relatively weak international activity.

“Asia-Pacific markets comprise four of the world’s top 10 financial centers and eight of the world’s top 20 and have grown the fastest since 2016,” New Financial said.

While Brexit has raised concerns in the UK about the need to keep the city globally competitive, the EU is strengthening its “strategic autonomy” on finance by forcing euro-share and swap trading to leave London for the bloc, and is now aiming for euro clearing.

In 2019, the UK accounted for 42% of all financial activity in an EU that still included the UK.

In 10 sub-sectors, which include hedge funds, foreign secondary equity issuance and trading, foreign exchange, clearing and commodity derivatives trading, there is more international activity than the now-27-member EU combined, New Financial said.

Reporting by Huw Jones; Edited by Elaine Hardcastle

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