It is no secret that the majority of foreign exchange transactions in the world are carried out thanks to special banking and other various commercial institutions. It is through them that enormous cash flows pass , ensuring stability not only of states in general, but also of individuals in particular. Any modern global financial center is a place where transactions for billions are conducted. In this article we will consider in detail all the features of these "gold veins".
Definition
First of all, we point out that the world financial center is the point of concentration of various banks, financial and credit institutions that carry out international financial, credit, foreign exchange operations, and also work with gold and securities.
Before the start of World War I, London was considered the strongest financial center, which at that time was the mecca of European capitalism. However, after the war ended, the United States seized the palm, and already starting in the 1960s, the US position significantly weakened, as new centers were formed in Japan and Western Europe.
Some information
Each world financial center is an active market mechanism of international importance, actively managing financial flows. Today, the countries of the European Union have somewhat strengthened their positions and become less dependent on the United States, which allowed London to once again take a dominant position on the European continent.
All global financial flows move through so-called channels, including:
- servicing sales operations and services;
- currency and credit services;
- injection of investments in fixed assets and working capital;
- work with securities;
- the transformation of a certain part of national income through the budget in the form of assistance to various developing countries.
The best of the best
The rating of world financial centers in 2016 is as follows:
- London.
- New York.
- Singapore.
- Hong Kong.
- Tokyo
- Zurich.
- Washington.
- San Francisco.
- Boston.
- Toronto.
Each of these giants of the global financial structure is worth considering separately.
Canadian miracle
Toronto is Canada's largest city and, concurrently, the administrative center of Ontario. The financial district of the country is physically a very densely built-up business quarters in which numerous banks, the main offices of major companies, accounting and law firms, and brokerage companies have “housed”.
Main city of massachusetts
Boston is the largest community in the US region, called New England, the country's oldest and richest city.
The main sectors of the economy of Boston include insurance, banking and finance. The city is home to the headquarters of Fidelity Investments, Sovereign Bank, and State Street Corporation.
Homeland of Silicon Valley
San Francisco is a city with a rapidly growing economy, which is largely ensured by the presence of a global center of advanced technology not only in the world of finance, but also in the biotechnology and biomedicine industry.
The city’s small business commission supported a campaign to maintain a small business share. Because of this, the city council was forced to impose restrictions on areas in which supermarkets can be erected. This strategy was supported by the population of the metropolis, who voted for the entry into force of restrictions.
An important point: small companies, the staff of which does not exceed ten people, make up about 85% of all existing enterprises in the city.
American capital
Washington is primarily the place where the largest number of government managers and workers involved in the service sector have concentrated.
Many companies, firms, independent contractors, non-profit organizations, and trade groups strive to be closer to or directly in Washington to lobby their interests as efficiently as possible, while being as close as possible to the federal government.
In Washington, two of the largest world companies are based in terms of their income: the mortgage lending agency - Fannie Mae (annual turnover of $ 29 billion, 270th place in the world ranking), as well as the US Postal Service ($ 68 billion, 92nd a place).
European Center
Zurich is a city in which about 208 thousand people are involved in the financial sector. This figure is not surprising, since finance is practically the main profitable sector of the economy of Switzerland. Every fifth job in the country is associated with monetary resources.
It is noteworthy that during the crisis of 2008 , a break in the banking system in this small European state did not happen. Zurich was able to pass through all the storms of the world economic storm without any problems, which, of course, puts it in the most favorable light before competitors on the world stage.
Japanese capital
Tokyo is a city in which the stock exchange was opened in 1878. However, for a hundred years, the metropolis has not been included in the cohort of international financial centers. There were several reasons for this at once:
- Japan's financial markets depended not on market forces, but on government policy, which was always focused on resolving the tasks of the exclusively national economy.
- In the period 1950-60-ies, Japan actively occupied imported capital.
- Foreign financial institutions did not seek to expand their operations in this market due to tough state regulation.
The so-called “oil shock” of 1974 stimulated the Japanese government to increase total spending in order to bring the state economy out of the crisis. A series of steps by the country's leadership has led to the opening of doors for foreign banks and securities trading companies in Japan. This, in turn, contributed to the introduction of a computerized system of conducting transactions in 1983, offshore banking markets were also created, and since 1987, the conclusion of financial agreements for a certain period has begun.
As a result, such an economic miracle led to the fact that today Tokyo is a world financial center with the highest competitiveness.
Leader of economic freedom
Hong Kong, like other new global financial centers, is a city of unique opportunities. The media do not pay too much attention to him, but if they do, it is exclusively in a positive way, calling him nothing more than a pearl of the East, a city of the future, a city of legend, etc.
For 18 years in a row, Hong Kong has been a leader in economic freedom. At the same time, GDP per person is 36,796 dollars. In addition, the center is a leader in terms of the number of billionaires - 40 people.
Hong Kong presents the most optimal development conditions to banks and various investors, which is made possible by:
- current legislation that protects intellectual property, goods and products from pirated fakes;
- insignificant restrictions in financial and banking activities;
- government guarantees;
- stability of own currency;
- low inflation;
- own international arbitration;
- proximity to Asian, fast-growing countries and markets;
- the presence of highly qualified employees who speak English.
Asian titanium
Singapore from 1968 to 1985 did not have any significant competitors in its region, which in many respects contributed to its development. Today, the world's largest financial centers of the planet are simply inconceivable without this state.
Singapore is a country with high technology and a strong economy. In the development of the financial center, transnational corporations play an important role . Also in Singapore, one of the highest gross national products in the world.
The country is attractive to investors because of the extremely low tax rates. There are only five taxes in the state, including income and wage taxes.
Of the imported goods, only four are taxable at the time of importation: any alcoholic beverage, tobacco products, cars, petroleum products.
US Capital Market Center
New York is the second in the world ranking of financial centers. The main period of its formation occurred in 1914-1945. The average daily currency market of the city is about $ 200 billion.
The New York capital market has the following features:
- All the largest investment institutions on the planet operate here: Salomon Brothers, Merrill Linch, Goldmen Sacns, Shearson Lehman, First Boston, Morgan Stanley, which guarantee the placement of various securities in the primary market.
- In the secondary market, stock trading is more important because of its colossal volume.
- Developing countries have fairly limited access to the New York capital market, due to the rather stringent requirements of the Securities Commission.
Unconditional dominant
All major global financial centers are lagging behind their leader, London. The British capital won the battle for the first position thanks in large part to its liberal legislation.
Almost 80% of investment banking operations directly or indirectly flow through London, so the city quite rightly took first place among all the financial centers of the world.
City of London owns 70% of the secondary market for all bonds and almost 50% of the derivatives market. In addition, the main city of Misty Albion is actively trading in foreign currency. This market segment is growing every year by 30%. About 80% of all hedge funds in Europe are managed from London.
In general, global financial centers (London is no exception) have well-informed international investment bankers, a well-developed communications network, and a fairly liberal regulatory structure.
Russian pillar
Nowadays, Moscow is a world financial center, which is quite low in the world ranking (75th place). The whole spectrum of problems that hinder Belokamennaya to rise above, whose hearts:
- Lack of full ships. The thing is that Russian judges are not fully aware of financial schemes and trading on the exchange, and also have no right to hold court hearings on these issues. This is because the financial operations of the exchange do not appear in the laws of the Russian Federation at all.
- Colossal taxes. Nowadays, in New York, London, Singapore, there are special tax rates on profits of 16.5%. Russia can only dream of such a thing for now.
- The lack of a financial instrument to protect investors from a sharp drop in the value of shares in the thirty-day period after their purchase.
- A large number of frauds and the lack of the required number of qualified financiers.
Nevertheless, the country's leadership has envisaged plans to bring Moscow to the level of a really powerful financial center by 2020, which will be quite competitive in its environment.