London and New York have maintained the top two positions in the The City of London’s Global Financial Centres Index 3 (GFCI 3).

The index, latest in the series which rates and ranks each major financial centre in the world in terms of competitiveness, said London and New York are some 90 points ahead of the next two centres.  

Dubai, Bahrain and Qatar have continued to gain significance in GFCI 3, highlighting their role as important regional financial hubs in the Middle East and beyond.

The consistently high price of oil and massive investments by national governments in the creation of financial hubs have helped to raise these two centres in the Index. Whether they can continue to climb depends on many factors,
not least of which is broad improvement in all five competitive aspects, in particular financial infrastructure, where both received relatively low scores.

The top eight centres in GFCI 3 have maintained the same rankings as in GFCI 2.

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.

London has halved its lead over New York (dropping from 806 points to 795 out of 1,000, and a reduced lead of nine points), possibly reflecting the run on the UK bank Northern Rock and prospective changes in the UK non-domiciled taxation system, both of which generated comment from respondents.

London maintained its overall lead in all five areas of competitiveness, that is, people, business environment, market access, infrastructure and general competitiveness. The responses were also broken down by the sector of the
respondents, and, for the first time, New York has overtaken London in the Banking Sub-Index. This may have been driven by a perception of the banking respondents that there has been a less effective regulatory response
to the problems at the Northern Rock bank in the UK than by the US in general to the global liquidity shock.
Chicago advanced from eighth to sixth place, despite continuing negative comment from respondents about Sarbanes-Oxley regulatory requirements in the US.

The Gulf state centres have risen strongly in the ratings between GFCI 2 and GFCI 3.

Dubai (ranked 24) continues to be identified in assessments as a key and growing regional hub, and Bahrain (39th) and Qatar (47th) have experienced the biggest increase in the ratings, by 59 and 51 points, respectively.

All of the Gulf State centres seem to benefit from substantial investment in financial infrastructure, the report said.

Off-shore centres performed increasingly well across the board in GFCI 3. The two main financial centres in the Channel Islands were listed separately in this Index, with Jersey ranking 16th, and Guernsey 19th out of the top 50
(compared with their combined ranking of 23rd in GFCI 2). Gibraltar (26th) and the British Virgin Islands (27th) were new to the GFCI. Although the Cayman Islands (25th) and Hamilton, Bermuda (28th) gained eleven points in
the ratings, they moved downward in the rankings because of new entries to the Index from off-shore and other centres. The Isle of Man remained in 21st place.

Johannesburg and Shanghai, both identified as “Volatile” in GFCI 2, scored substantially higher in the ratings here. Johannesburg gained 48 points in the ratings, and Shanghai 27 points, although falling from 30th to 31st in the GFCI 3 rankings. Respondents still identified them as notably dynamic on both a regional and global scale.

Among the financial centres to watch, the top three cities identified as becoming “…significantly more important over the next two to three years…” were Dubai, Shanghai, and Singapore.

Issues of regulation and access to dynamic pools of skilled labour were repeatedly identified as key concerns, though transportation infrastructure remained a frustra