NY Steals London’s Mantle As World’s Top Financial Center

LONDON (Bloomberg) -

New York replaced London as the world’s leading financial center for the first time, after London was rocked by a series of scandals and questions over the U.K.’s place in the European Union.

New York holds the top spot in the latest Global Financial
Centres Index with a “shaky, statistically insignificant” two-point lead, according to Michael Mainelli, chairman of Z/Yen
Group, which compiles the index. Hong Kong and Singapore, the two leading Asian centers, have narrowed the gap between them and the top two to fewer than 30 points on a scale of 1,000, the index shows.

Scandals including banks abusing their clients by selling unneeded insurance, manipulation of financial benchmarks and trading losses, have combined to damage London’s reputation for probity, just as plans for a referendum on EU membership cast doubt on the terms of its access to that market. While New York has challenged London for the pedestal since the inception of the index in 2007, a seven-point rise in its rating gained it the top spot after the U.K. capital suffered a 10-point decline, the largest of any center in the top 50.

“London needs a reputation that everyone who comes will be treated fairly and can compete fairly,” according to Mainelli. “Without the large domestic economies behind New York and Hong Kong, London needs to act more like a Singaporean city state or have the backing of a European Union domestic economy.”