Finance is a global industry, and the largest firms are based in financial centers, which are areas that provide venues for financial activities to take place. Below, Arlington Title Loans takes a look at the ten most powerful financial centers in the world (in no particular order).
#1: New York City
New York City is the financial hub of the U.S., and of the entire world. The New York Stock Exchange is the largest stock exchange on earth. Most global financial firms have a presence in New York City.
London has been an important financial center for centuries. It is home to the London Stock exchange, which is the largest stock exchange in Europe. The London Bullion Market Association is the largest center for gold and silver trading in the world.
Switzerland is not part of the European Union, so companies operating in Zurich are not subject to the EU’s regulations on the financial industry. For this and other reasons, insurance companies and asset managers find Zurich an accommodating place to do business.
During Japan’s financial boom during the 1980’s, Tokyo emerged as a powerful financial center. Tokyo’s Japan Exchange Group is the third-largest stock exchange in the world, boasting a market capitalization equal to $4.5 trillion USD. Economic growth in Japan has been stagnant for several years, but Tokyo as a financial center remains relevant.
#5: Hong Kong
Minimal taxation and regulations have fostered a robust economy in Hong Kong. In 2009, 22 percent of all initial public offering capital was raised in Hong Kong. Ranked consistently as the most economically free area in the world, it’s no wonder Hong Kong is a powerful financial center.
Tiny Singapore has established itself as a major global financial player in recent years. It is Asia’s primary center for commodity and foreign exchange trading, and is also a major center for fixed-income trading.
Chicago’s roots as a financial center go back almost 180 years. The Chicago Board of Trade (CBOT) was started in 1848 as a center for commodity futures trading. The CBOT is still going strong, as are other exchanges such as the Chicago Mercantile Exchange (CME) and the Chicago Board Options Exchange (CBOE).
Frankfurt is the home of two central banks: Deutsche Bundesbank, which is the central bank of Germany, and the European Central Bank. As China continues to be a major global financial player, Frankfurt’s stature stands to increase, as Deutsche Bundesbank was designated recently as Europe’s center of exchange for the Chinese currency.
As the largest city in the world’s most populous country, it makes sense that Shanghai is a financial powerhouse. The capital markets in China are incredibly restricted, which may be holding back Shanghai from reaching its full potential, but the city continues to grow in influence and likely will continue to do so.
The largest city in Australia is also its busiest center of finance. Two of Australia’s four largest banks are headquartered there, as well as twelve of the top fifteen Australian asset managers.
There are many cities across the globe where financial business is done, but these ten are some of the most powerful in the world.