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WORLD-FINANCES-CENTER
London joins New York at top, FT
London, September 10 2008
London's efforts to challenge New York as the dominant financial centre will receive a boost today with a new study by the World Economic Forum showing that the UK ranks alongside the US as the world's most developed financial system, according to The Financial Times.
The US and the UK came out as joint leaders of the WEF's first "financial development index", followed by Germany, Japan, Canada and France.
The index is an attempt to measure the health of the financial systems of 52 countries by looking at factors ranging from the stability of the banking sector to the soundness of the regulatory and political environment.
Venezuela was at the bottom of the index, just below Ukraine and Nigeria, according to the report.
WEF officials say they will present the report, which was led by Nouriel Roubini, the New York university professor, to regulators and bankers around the world over the coming months.
They believe the study can help policymakers and industry leaders to improve national financial systems at a time of severe strain by highlighting their respective strengths and weaknesses.
Despite being virtually tied at the top of the index, neither the US nor the UK received full marks from the WEF. Weaker points for the US included the regulation of security exchanges, the protection of intellectual property rights and the relatively high risk of banking crises - an issue that has come to the fore since the onset of the credit crunch.
Corruption and the regulatory burden were also seen as areas of weakness for the US, the report said.
However, the US edged out the UK at the top of the rankings for financial markets - a finding that will bolster New York's efforts to present itself as the world's pre-eminent capital markets hub.
The UK also scored poorly on the regulatory front and was in the bottom half of the index when it came to corporate taxation and the "cost of doing business" - the price of obtaining licences and registering property.
In a surprise finding, the report ranked Malaysia's banking system as the second best in the world, based on its size, efficiency and financial disclosure, behind the US but ahead of the UK.