1. Built environment
August 17, 2022updated 07 Aug 2023 10:45am

Which cities have the largest financial centres?

The largest financial centres in the world, whether New York, London or Beijing, are built on high volumes of banks and stock exchanges.

By Silvia Pellegrino

Financial centres are cities or regions with a strategic location for market activity, which means that there has to be a high concentration of both people and infrastructure. They typically include financial institutions, stock exchanges, a high number of both public and private banks, as well as trading and insurance companies. 

The iconic Charging Bull statues in New York, one of the world's largest financial centres.
The iconic Charging Bull statue at Broadway and Whitehall Street in the Financial District of Downtown Manhattan, New York City. (Photo by Alex Potemkin/iStock)

These hubs are generally equipped with first-class infrastructure, commercial and communications systems, and a stable political system. They are also usually more populated too due to the high standard of life they offer, with great growth opportunities for the cities.

Here are the top ten global financial centres.

1. New York City, US 

New York City is commonly referred to as the finance capital of the world. It was even ranked first in the World’s Financial Centres by the Global Financial Centres Index.  

The history of New York’s financial status can be traced back to the First World War when the US was the world’s largest debtor nation because foreign investors owned a lot of American assets. However, after the war, the US went from being considered the world’s largest debtor to the world’s largest creditor, and that was the base for New York’s current status as the finance capital of the world.

Wall Street is the most active stock market, and the New York Stock Exchange (NYSE) is the largest stock exchange by market capitalisation, which reached $25.85trn in June 2022. 

New York City is the home of some of the biggest companies (such as Fortune 500 and Fortune 1000), the biggest banks (Morgan Stanley, JP Morgan) – and industries.  

2. London, UK 

London is one of the most prominent trade and business centres in the world. In fact, it is a well-known centre for foreign exchange and bond trading in addition to banking and insurance services.

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There are a few areas where London excels on the global stage. For instance, London increased its share of headquarters of Fortune Global 500 firms by more than one-third this year; consequently, London and the UK are Europe’s leading destinations for investment in financial services.

Even after Brexit, London has kept up a set plan of action. On 19 July, the chancellor announced the introduction of the 2022 Financial Services and Markets Bill, which is an important step towards the future of financial services. Its objectives are to enhance the competitiveness of UK financial services, unlock growth and investment across the UK, and ensure the sector continues to deliver in the interests of British people and businesses.

The London Stock Exchange is the second-largest stock exchange in Europe, after Euronext which covers France, Belgium, the Netherlands, Ireland, Norway, Portugal and even the UK. In addition, The London Bullion Market is the largest market for gold and silver bullion trading.  

3. Hong Kong, China 

Hong Kong not only hosts a large number of banking institutions, but it also is the home to many fund management companies. 

Hong Kong has benefited from its strategic location for more than a century. In fact, the city has long been a conduit of trade between China and the rest of the world. It is China’s second-largest trading partner after the US. 

The city was for decades seen as a stable link between eastern and western markets due to the ‘One Country, Two Systems’ arrangement made with the UK after its independence. This has come into question in recent years, however, due to the concerns over freedoms as a result of the National Security Law and increasing ties with China. On the other hand, Hong Kong benefits from very few and low tax rates, as well as hosting the Hong Kong Stock Exchange, which is almost as large as New York’s.

4. Shanghai, China 

China’s most prominent market for stocks in terms of turnover, tradable market value and total market value is also located in Shanghai: the Shanghai Stock Exchange (SSE). The SSE had a market capitalisation of $7.63trn as of July 2021. The SSE is directly governed by the China Securities Regulatory Commission (CSRC).  

In 2009, the Chinese government announced its ambition of turning Shanghai into an international financial centre by 2020, as it had yet to reach the country’s financial ambitions.

Two of the objectives are:
• to make the yuan completely convertible
• lift internet transparency in the city

These goals have not been completely achieved yet, but measures are in place to keep the process going. For example, the main framework of the Shanghai international financial centre is in place. Its price formation and RMB payments clearing functions are well developed. And, as a financial centre, Shanghai’s sector is increasingly internationalised

5. Los Angeles, US

An increasing number of businesses, particularly in fintech, are choosing to expand their operations into Los Angeles thanks to the strong talent pool and low real estate costs. Los Angeles is indeed on track to become one of the world’s largest financial hubs. 

Los Angeles produces a GDP output of about $1trn every year. However, there are no major banks based in the region. Commercial banks were replaced in Los Angeles by a range of alternative lenders, particularly in the real estate field.  

Los Angeles has emerged as the nation’s leading logistics and transportation centre, as well as being the largest manufacturing region. It has also capitalised on traditional strengths in media and creative fields, consumer goods and tourism. 

[Read more: Where are the largest cities in the US?]

6. Singapore 

Singapore’s strength as a financial centre is its economic and political stability. The small island of Singapore has established itself as one of the Four Asian Tigers and as one of the world’s major finance hubs.

Singapore is a small city-state, with only 1% of land available for food production. Despite the disadvantages of limited land and resources, Singapore was able to transform its economy. In fact, it is both diversified and specialised across industries like chemicals, biomedical sciences, petroleum refining, electronics and mechanical engineering. 

Singapore has deep capital markets and is a world leader in its insurance and wealth management marketplaces.  

7. San Francisco, US

San Francisco, like Los Angeles, is home to multiple sectors including fintech. The city has grown its reputation in the burgeoning industry built on new businesses to become a global start-up centre.

San Francisco hosts a large concentration of corporate headquarters, law firms, real estate firms, insurance companies, savings and loan banks, and other important financial institutions. In fact, all six San Francisco Fortune 500 companies are located in the financial district: 
• McKesson
• Wells Fargo
• Gap
• Charles Schwab 
• Pacific Gas & Electric Company
• Salesforce.com

According to US census data, as of 2012–16, the Financial District in San Francisco boasts 372,829 jobs and serves as the city’s main central business district. 

8. Beijing, China 

Beijing is the regulatory centre for financial services in China, as well as the headquarters of the financial regulatory authorities, Asian Infrastructure Investment Bank, the Silk Road Fund, and the four major national banks, including People’s Bank of China.

All of these financial institutions are located on Beijing Finance Street, which has become China’s new ‘Wall Street’. After its completion, Beijing Finance Street introduced a new model of mixed-use development to China that contributed to the region’s rising global prominence in the financial and retail field.

China’s economic growth over recent decades is due to the development and evolution of its financial centres in Beijing, Hong Kong and Shanghai.

9. Tokyo, Japan 

Tokyo is not only the capital of the third-largest economy in the world but also a major financial centre. In fact, the city hosts the headquarters of many of the world’s largest investment banks and insurance companies, such as Banca d’Intermediazione Mobiliare IMI SpA and Tokio Marine Holdings.

Tokyo is also the hub for Japan’s telecommunications, electronic, broadcasting and publishing industries. 

The Japan Exchange Group (JPX) was established on 1 January 2013 by combining the Tokyo Stock Exchange (TSE) Group and the Osaka Securities Exchange. The exchange had a market capitalisation of $7.3trn as of July 2022

10. Shenzhen, China 

Shenzhen’s financial district, called Ping An, is a 115-storey, 559m-tall skyscraper. It is the home of the headquarters of the nation’s tech giants Huawei and Tencent, and its GDP in 2018 surpassed Hong Kong’s GDP.

Shenzhen is a very experimental city. For instance, it became the test bed for the largest trial of China’s digital yuan. This is a digital version of China’s official currency, and it is part of China’s push for a cashless society. The digital yuan could act for retail digital transactions in a centralised payment system, and it could contribute to China’s financial inclusion and stability. It also gained autonomy over its legal and administrative affairs. 

[For more on cross-border payments, visit: capitalmonitor.ai/companies/corpay/]

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