42-614: Abu Dhabi Global Market ( ADGM ) is an international financial centre and free zone located on Al Maryah Island in the United Arab Emirates 's capital, Abu Dhabi . The financial centre was established in 2013 and became fully operational in October 2015. It has three authorities – the financial services regulator, the registration bureau and the ADGM courts, whose Chief Justice is Lord Hope of Craighead . In January 2015,
84-469: A centre for finance in the Middle East , including for Islamic finance . The rapid rise of India has enabled Mumbai to become an emerging financial centre. India is also making an International Financial Centre GIFT City 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
126-538: A financial city: "a pool of capital to lend or invest; a decent legal and taxation framework; and high-quality human resources". 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. These centres appear in all FSF–IMF lists of OFCs and, bar the Caribbean OFCs of the Cayman Islands,
168-400: A hierarchy of strategic geographic locations with varying degrees of influence over finance , trade , and culture worldwide. The global city represents the most complex and significant hub within the international system, characterized by links binding it to other cities that have direct, tangible effects on global socioeconomic affairs. The criteria of a global city vary depending on
210-553: 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 , with legal services provided in London. Financial institutions located there provided services internationally such as Lloyd's of London (founded 1686) for insurance and the Baltic Exchange (founded 1744) for shipping. During
252-538: 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 International Financial Centre has become the fastest growing financial hub in Central Asia. Dubai has become
294-420: A wide range of financial services , for example relating to mergers and acquisitions , public offerings , or corporate actions ; or which participate in other areas of finance , such as private equity , hedge funds , and reinsurance . Ancillary financial services include rating agencies , as well as provision of related professional services , particularly legal advice and accounting services. As of
336-1212: 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). 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 / securitisation , and can include smaller locations (e.g. Luxembourg ), or city-states (e.g. Singapore). Since 2010, academics consider Offshore Financial Centres synonymous with tax havens . The IMF noted that OFCs could be set up for legitimate purposes (listing various reasons), but also for what
378-421: Is a consensus on the leading world cities, the chosen criteria affect which other cities are included. Selection criteria may be based on a yardstick value (e.g., if the producer-service sector is the largest sector then city X is a world city) or on an imminent determination (if the producer-service sector of city X is greater than the combined producer-service sectors of N other cities then city X
420-458: 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
462-686: Is a location with a significant concentration of participants in banking asset management , insurance , and financial markets , with venues and supporting services for these activities to take place. Participants can include financial intermediaries (such as banks and brokers), institutional investors (such as investment managers, pension funds , insurers, and hedge funds ), 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 (OTC), directly between participants. Financial centres usually host companies that offer
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#1732779528645504-402: Is a world city.) Although criteria are variable and fluid, typical characteristics of world cities include: Global city rankings are numerous. New York City , London , Tokyo , and Paris are the most commonly mentioned. The Globalization and World Cities Research Network (GaWC) is a think tank that studies the relationships between world cities in the context of globalization . It
546-517: Is based in the geography department of Loughborough University in Leicestershire , United Kingdom . GaWC was founded by Peter J. Taylor in 1998. Together with Jon Beaverstock and Richard G. Smith , they create the GaWC's biennial categorization of world cities into "Alpha", "Beta" and "Gamma" tiers, based upon their international connectedness. The cities in the top two classifications in
588-890: The Global Financial Centres Index and the Xinhua–Dow Jones International Financial Centres Development Index . The Global Financial Centres Index ("GFCI") is compiled semi-annually by the London -based think tank Z/Yen in conjunction with the Shenzhen -based think tank China Development Institute . The 36th edition of the GFCI was published in September 2024. Old finance centres such as Amsterdam, London, Paris, and New York have long histories . Today there
630-584: The Italian city-states (such as Venice and Genoa ) of the late medieval and early Renaissance periods while Florence can be said to be the birthplace of double-entry bookkeeping from the publication and proliferation of the work of Luca Pacioli . 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
672-464: The Low Countries , first to Bruges , and later to Antwerp and Amsterdam which acted as Entrepôt cities. They also became important centres of financial innovation, capital accumulation and investment. By the early 1800s, London officially replaced Amsterdam as the world's leading financial centre. London and Paris were the world's only prominent financial centres throughout most of
714-606: The 11th century in the Kingdom of England at the annual fair of St. Giles and in the Kingdom of Germany at the Frankfurt autumn fair, then developed in medieval France during the Champaign Fairs. The first real international financial centre was the city state of Venice 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
756-595: The 19th century. After 1870, Berlin 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 , Zurich , and Geneva . London was the leading international financial centre in the four decades before World War I . 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 , Hong Kong , Singapore and Shanghai . London has been
798-689: The 2024 edition are: In 2008, the American journal Foreign Policy , working with the consulting firm A.T. Kearney and the Chicago Council on Global Affairs , published a ranking of global cities based on consultation with Saskia Sassen , Witold Rybczynski , and others. The ranking is based on 27 metrics across five dimensions: business activity, human capital , information exchange, cultural experience, and political engagement. The top ranked cities in 2024 are: Advisory firm Oxford Economics released its Global Cities Index in 2024, ranking
840-604: The 2024 edition of the Global Financial Centres Index , New York City , London and Hong Kong ranked top 3 globally, while other well known financial centres include Singapore , Shanghai , Frankfurt and Tokyo , amongst others. In April 2000, the Financial Stability Forum ("FSF"), concerned about OFCs on global financial stability produced a report listing 42 OFCs. In June 2000, the International Monetary Fund (IMF) published
882-483: The 20th century London played an important role in the development of new financial products such as the Eurodollar and Eurobonds 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
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#1732779528645924-477: 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 . 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
966-818: The Abu Dhabi Global Market announced that it had renamed the location it was based in, “Sowwah Square”, to " Abu Dhabi Global Market Square ". ADGM regulates the trading of digital assets and became an attractive jurisdiction for crypto companies after it introduced digital asset regulation in 2018. That same year ADGM joined the World Alliance of International Financial Centers . 24°30′04″N 54°23′20″E / 24.50105°N 54.38884°E / 24.50105; 54.38884 Financial centre A financial centre ( financial center in American English ) or financial hub
1008-549: 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. 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. Primitive financial centres started in
1050-474: 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. 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
1092-500: 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
1134-468: The World’s Best Cities ranking. They are ranked in three categories: livability, lovability and prosperity, each of them using different factors. The top 10 cities in 2024 are: Strength as a financial center has become one of the pre-eminent indicators of a global city's ranking. As of 2024, the cities representing the top ten financial centers according to the Global Financial Centres Index by
1176-517: The academic lists of tax havens include all the FSF–IMF OFCs). In July 2017, a study by the University of Amsterdam 's CORPNET group, broke down the definition of an OFC into two subgroups, Conduit and Sink OFCs : Sink OFCs rely on Conduit OFCs to re–route funds from high–tax locations using base erosion and profit shifting ("BEPS") tax planning tools, which are encoded, and accepted, in
1218-452: The control of customs in China. After the establishment of People's Republic of China, the financial centres in China today are Beijing , Shanghai , and Shenzhen . Global city A global city is a city that serves as a primary node in the global economic network. The concept originates from geography and urban studies , based on the thesis that globalization has created
1260-416: 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 , the think-tank 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
1302-599: The largest centre for trading in public equity and debt capital markets , driven in part by the size and financial development of the U.S. economy . The NYSE and NASDAQ are the two largest stock exchanges in the world. New York also leads in hedge fund management; private equity ; and the monetary volume of mergers and acquisitions . Several investment banks and investment managers headquartered in New York City are important participants in other financial centres. The New York Federal Reserve Bank ,
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1344-419: The largest financial centres relative to their domestic economies. Progress from 2000 onwards from IMF – OECD – FATF 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 , and use the term OFC and tax haven interchangeably (e.g.
1386-491: The largest within the Federal Reserve System , regulates financial institutions and implements U.S. monetary policy , which in turn influences the world's economy. The three major global credit rating agencies – Standard and Poor's , Moody's Ratings , and Fitch Ratings – are headquartered or co–headquartered in New York City, with Fitch being co–headquartered in London. In Asia , Tokyo emerged as
1428-499: 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
1470-829: The second largest concentration of hedge funds (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 , although this ended on 31 January 2020 when the United Kingdom left the European Union following the Brexit referendum of 2016. As well as the London Stock Exchange , the Bank of England ,
1512-679: The second oldest central bank, is in London, although the European Banking Authority moved to Paris after Brexit. Since the middle of the 20th century, New York City, represented by Wall Street in Manhattan's Financial District , has been described as a leading financial centre. Over the past few decades, with the rise of a multipolar world with new regional powers and global capitalism , numerous financial centres have challenged Wall Street, particularly London and several in Asia, which some analysts believe will be
1554-583: The source. Common features include a high degree of urban development , a large population, the presence of major multinational companies , a significant and globalized financial sector , a well-developed and internationally linked transportation infrastructure , local or national economic dominance, high quality educational and research institutions , and a globally influential output of ideas, innovations, or cultural products. Quintessential examples, based on most indices and research, include New York City , London , Paris , and Tokyo . The term 'global city'
1596-447: The term in 1915. The term ' megacity ' entered common use in the late 19th or early 20th century, the earliest known example being a publication by the University of Texas in 1904. In the 21st century, the terms are usually focused on a city's financial power and high technology infrastructure. Competing groups have devised competing means to classify and rank world cities and to distinguish them from other cities. Although there
1638-735: The world's largest 1,000 cities based on 27 indicators across five categories (economics, human capital , quality of life , environment, and governance ) with more weight on economic factors. The top ranked cities in 2024 are: The Tokyo-based Institute for Urban Strategies at The Mori Memorial Foundation, issued a study of global cities in 2008. They are ranked in six categories: economy, research and development, cultural interaction, livability , environment, and accessibility, with 70 individual indicators among them. The top ten world cities are also ranked by subjective categories, including manager, researcher, artist, visitor and resident. The top 10 cities in 2023 are: Consultancy firm Resonance publishes
1680-475: 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 markets , foreign exchange markets , money markets , issuance of international debt securities , international insurance , trading in gold, silver and base metals through the London bullion market and London Metal Exchange , and international bank lending . London has
1722-592: 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 , mainly due to its geographical location at the estuary of the Yangtze River and to
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1764-415: Was popularized by sociologist Saskia Sassen in her 1991 book, The Global City: New York, London, Tokyo . Before then, other terms were used for urban centers with roughly the same features. The term 'world city', meaning a city heavily involved in global trade, appeared in a May 1886 description of Liverpool , by The Illustrated London News ; British sociologist and geographer Patrick Geddes used
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