London ranks ahead of New York

London has edged ahead of New York in a ranking of financial centres suggesting that the City is slightly more likely to be named as the chosen location for transactions requiring a global financial centre, according to the UK business district's governing body.

But the Corporation of London's latest research, following a first survey in 2003 when New York came top, said the two cities would continue to be "neck and neck". It warned the City of London against complacency and said China's increasing economic power made it likely to host a new global financial services centre in future years.

Compared with a previous study in 2003, London and New York had moved even further ahead of Frankfurt and Paris when assessed according to criteria seen as important for competitiveness by 400 individuals working in the industry.

"Although Paris and Frankfurt are extremely important regional financial centres, the pre-eminence of the City and Wall Street is if anything even more pronounced than before," said Michael Snyder, the corporation's chairman of policy and resources.

No one consulted in the survey believed London and New York would lose their positions as global financial centres within the next 10 years. But respondents were divided over whether there was scope for a third one.

If one did develop, most felt it would be in China, probably in Shanghai. Respondents did not believe Tokyo could recover its previous importance because of bureaucracy and poor regulation.

The report's authors warned that there was no room for either London or New York to be complacent about strengths that were often brought about by historical factors, when the future could bring fresh competitive challenges.

For example, the survey suggested corporate and personal tax regimes were likely to be of greater concern to the financial sector over the next three years, although most were finding ways to cope at the moment.

But concerns that a relatively light regulatory burden was getting heavier were offset by the flexibility and quality of staff in London as well as by a view that regulation was more of a problem elsewhere in the EU. - (Financial Times Service)