Financial Districts in Global Cities

Feb 19, 2014 8:07:34 AM / by Stephanie Sadler

“Connecting Global Cities” is a monthly column written by Colin Speakman, Director of China Programs for CAPA International Education. In this month's column, Colin looks at the financial districts of CAPA's global cities.

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Seven of CAPA’s eight study abroad destinations - all global cities - feature on Mastercard's list of top 75 financial cities in the world. One of the key elements that determines whether or not a city can be regarded as a global city overall is the answer to the question: Do economic and financial decisions in that city impact a wider area, region or even the world?

The top two most important international financial centers (IFCs) in October 2013 were London and New York, according to the Global Financial Centers Index which has compiled a list since 2007 based on research by the World Bank, the OECD and the Economist Intelligence Unit.

Photo: NYSE, NYC by Brian Glanz

New York is an excellent example of a global city where events reverberate around the world, as benefits the world's leading economy. A good run in the Big Apple's stock markets can boost confidence in global markets. Equally a crisis on Wall Street can hit many other countries - think of the Western Financial crisis of 2008. We probably all feel familiar with Wall Street given there have been quite a few movies about the wheelings and dealings there.

The Square Mile
Photo: The Square Mile, London by Michael Garnett

London might seem to be punching above its weight since the UK is the 6th largest economy. As a Brit, I might sound biased, but London deserves that number 1 spot in financial centers because it takes time to build up an IFC. There was the Industrial Revolution, the trading power of the British Empire, the days the British Pound was the leading international currency and, once banks and insurance companies and other financial intermediaries had flocked to London, they were there to stay. The City of London has reinvented itself a few times, but English is the language of international finance, taxation policies have usually been fair on large income earners and this cosmopolitan metropolis combines economic, political and cultural capital in one - thus an attractive place for financiers to live.

Singapore Financial District Buildings, Marina Bay
Photo: Financial district of Singapore by David Blackwell.

Asian global cities have a key role to play as well. Round-the-clock markets cover the time zones of America, Europe and Asia. Hong Kong (number 3) benefits from this. So does Tokyo (at number 5), with Japan coming in as the second largest economy for many years. Singapore (at number 4), a city state with English as one of the local languages and a strong legal system, does as well. Now that China is the second largest economy and inevitably heading to top spot, Shanghai is poised to become a leading Asian, then global, financial center as well. It rose an impressive eight places in the last year to number 16.

Financial district
Photo: Dubai's financial district by Timo Tervo

There are a lot of IFCs, including those "Gnomes of Zurich" (at number 6), another city where English is fluently spoken. We shall see a rise in the position of such centers in the Arab world this decade - notably Qatar at number 24 and Dubai at number 25. For now, let's look at the nature of the financial centers in CAPA's eight global cities - and see which is the odd one out!


Given China's mixed economy where government planning still has a major impact, key decisions are made in Beijing as the political capital certainly impact the world. Long ago, the Chinese government required offices of major financial institutions to be based in the capital, mainly in an area called Financial Street, and the powerful central bank, the People's Bank of China, is headquartered in Beijing. So those who choose to study abroad to Beijing can certainly see a financial area a bit like a mini Manhattan. However, authorities have designated Shanghai (see below) for taking forward financial developments. The government in Beijing has designed a new wave of economic and financial reforms where market forces are to rise to the top and market flexibility will be tested in Shanghai more than anywhere else.

People's Bank of China
Photo: People's Bank of China by Bert van Dijk


The Central Business District (CBD) is the financial, commercial and cultural hub also known as the City Portena and Microcentro. It has an important regional financial role, a link to Buenos Aires (BA) - the leading port of Argentina - which is especially relevant for agricultural exports and trade financing. Of course the Central Bank of the Republic of Argentina is there, the Buenos Aires Stock Exchange and specialist exchange for agricultural products such as meat, cattle, grain and fruit. There is more stability nowadays than there was in December 2001, when riots took place in Buenos Aires during a government debt crisis and a large default, and in early 2002 the Argentine Peso's link with the US dollar was broken and the currency rapidly lost value. The shadow of that period still limits Argentina's access to global capital markets today and recently the peso has again depreciated against the US Dollar. Of course, that makes BA a value place for Americans to visit!

2012Photo: Microcentro, Buenos Aires by José María Pérez Nuñez


The financial center of the Republic of Ireland is located in the economic, political and cultural capital of Dublin, also a leading port for imports and exports. The Irish Stock Exchange and the Irish Financial Services Center are there. The western financial crisis took its toll from 2008 with leading Irish banks failing, amid scandals and needing a bailout. Economic austerity programs were introduced. However, recently Ireland announced that it was the first Eurozone member exiting an EU/IMF bailout program without drawing on the remainder of the funds available. Cyprus, Greece and Portugal are still working through ongoing EU support funds. Unlike Buenos Aires, Dublin has been embraced again by the capital markets and can access funds commercially.

Nice To See That Someone Still Has A Job At The Irish Stock Exchange
Photo: The Irish Stock Exchange, Dublin by William Murphy


Yes, Firenze is our odd city out as today it is not in the list of IFCs. Italy, of course, has two major cities - Milan in the North and Rome for the South - that are well established on current lists. That does not mean that Florence should simply be thought of as a great center of art and cuisine. Quite the opposite as in times long past, starting with the Renaissance, Florence was the leading financial center of Europe partnered with Venice as the leading trading center. The famous Medici family brought modern banking to Europe and made their home in Florence. The Medici Bank was the largest in Europe in the 15th century. There was much upheaval and ultimately the Medici Bank failed, but the legacy of this family includes Florence's Uffizi Gallery and the Pitti Palace. The history of the Medici period is immortalized in Florence street names.

Image: Marinus van Reymerswaele (Reymerswaele c.1490-Middelburg, documented up to 1567), "The Money-changer and his Wife", 1540, oil on panel, 84 x 114 cm. Florence, Museo Nazionale del Bargello, Carrand Legacy, inv. 2058 C. via Coins Weekly.


Given Istanbul's strategic location straddling Europe and Asia and the importance of financial centers in both continents, it makes sense for the city to seek a role as an IFC that can embrace both regions. Istanbul currently ranks number 44 on the list, but it rose 13 places in the last year and, like Shanghai and Dubai, it appears on the list of the 10 IFCs likely to become more significant in future years. Last year a forum in Istanbul was held to promote the city as an IFC as it has most of the 5 characteristics needed:- capacity, connectivity, competitiveness, capital and speciality. I guess they could not find a word beginning with "C" for the last characteristic? Yet the point is well-made.. huge future potential to rise up the listings.

Bank Towers of Istanbul
Photo: Bank towers, Istanbul by Pi István Tóth


The City of London (the Square Mile) is the famous and historic area that symbolizes the world's leading IFC. It should not be confused with the Metropolis of London with 32 boroughs. The City is small and with its own Lord Mayor and police force. While the Royal Exchange (original stock exchange) and Bank of England are fabulous iconic buildings and the Lloyd's of London insurance building is a modern classic, new technology has changed the atmosphere. Long gone are the open outcry markets of the London Stock Exchange and the London International Financial Futures Exchange - markets "meet" on computer screens in the dealing rooms of financial institutions and not in a central building. It is not like the New York exchanges. With expansion, a chunk of the banks are now located in Canary Wharf, further down past Tower Bridge. However, London continues to evolve as an IFC and the latest project is to be the leading offshore Chinese RMB trading, lending/borrowing center.

Canary Wharf - London Docklands
Photo: London's Canary Wharf by Frank Da Silva


Towards the end of the last decade, the Chinese government decided that Shanghai, rather than Beijing, would be the mainland's leading IFC. This linked not only to international finance, but to becoming a leading insurance center and world cruise center.The city has already become the world's leading container port. Shanghai benefits from a fusion of Eastern and Western traditions and attractions, including arts, cuisine and entertainment. It is thus an attractive place for global financiers to relocate to and a global city that understands the importance of English as the business language. The financial district is centered in Lujiazui in Pudong in East Shanghai. The recently announced Pilot China Free Trade Zone in the outskirts of Shanghai will serve to boost experiments in increased financial flexibility and international capital movements that need to develop in China.

Photo: IFC Mall in Shanghai by Colin Speakman


This Australian global city is in an earlier timezone than its Asian partners in the Pacific Rim. That gives Sydney an advantage and helps push it to number 15 in the Global Financial Centers Index and up four places on the previous year. It is Australia's largest and most populated city with great arts, cuisine, entertainment and lifestyle attractions, hence another place attractive to global financiers. With English as the official language, it's easy to settle into the Central Business District. Last year, China agreed with Australia to trade directly in conversion of Chinese RMB to Australian Dollars, strengthening Sydney's role in Asia Pacific Rim trade. Sydney ranked 7th in a survey of innovation in 100 Asia Pacific cities and it is certainly "pivoting towards Asia" in its financial future.

World Square, Sydney
Photo: CBD, Sydney by Christopher Chan

Do you live in a city that is a leading financial center? If so, how does that impact on you? Tell us about it in comments.

Topics: Global Cities