How London lost its financial crown to New York
Political uncertainty in the UK, City scandals and restricted bonuses have all damaged the capital
NEW YORK has overtaken London as the world's leading financial centre for the first time since 2007, according to the influential Global Financial Centres Index.
The Big Apple's lead is small, reports the FT. However, it reflects the fact that the City's reputation has been undermined by several problems, said
Mark Yeandle of Z/Yen Group, which compiled the index. And he warned that these issues have now reached "tipping point".
Many of the survey's 3,246 respondents were exercised by the question of Britain's place in Europe, ahead of a possible referendum, as well as the uncertainty posed by the Scottish independence vote. Both have heightened concerns about the long-term stability and structure of the UK.
London has been hit harder than other centres by the Libor and Forex rigging scandals because of its larger market share. Domestic imbroglios, like the combined £20bn compensation payouts made by UK banks for PPI mis-selling, have contributed to a damaging "drip-feed" effect. There are concerns that the
resulting "regulatory creep" could stifle the City's entrepreneurialism.
The continuing crackdown on bankers' bonuses is making financial centres like New York, Singapore and Hong Kong, where pay is less constrained, more attractive as places to work.
A version of this article appears in the 22 March 2014 edition of The Week