Financial center

The financial center of Frankfurt am Main is the most important continental Europe after Zurich. The city is the seat of the European Central Bank .

A financial center (or financial center ; English financial center ) is a place or state that has a high concentration of the financial sector and where the existence and activities of market participants are not or barely restricted by market regulation , so that transactions can be carried out with lower transaction costs than elsewhere.

General

The financial sector includes the financial markets ( money , foreign exchange and capital markets including stock exchanges ) and market participants such as financial service providers , investment funds , credit institutions , pension funds , insurance companies or securities service companies . They all contribute to a high share of the financial economy in the gross domestic product , which makes a place or state a financial center.

An international financial center is usually a place where there are a large number of leading national and foreign financial institutions ( foreign banks ) that have business relationships with one another through interbank trade or international credit transactions .

Large cities or city-states ( Singapore , Monaco ) are usually referred to as financial centers , but the term is also used for (mostly) small states . The Switzerland is due to their tax law often referred to as a financial center. A special feature are so-called offshore financial centers , which are characterized by low taxes , a high degree of confidentiality and secrecy (no disclosure of information about financial transactions and ownership) and minimal financial market supervision and regulation. These are mostly smaller islands that represent separate legal entities (e.g. the Cayman Islands and Gibraltar as British overseas territories or the Channel Island of Jersey as the crown property of the British crown ).

species

Four categories of financial centers can be distinguished, which are hierarchically related to one another. On the first level are the national financial centers that target the needs of domestic market participants. The second level is formed by regional financial centers with responsibility for an economic region . The third level consists of offshore financial centers that have a low tax rate ( low-tax country ), low labor costs ( low-wage country ) or low market regulation . Global financial centers , including Frankfurt, meet the needs of a global clientele.

history

The first international financial center was probably Florence in the 13th century, which achieved this role mainly through international trade and by lending money to rulers. In northern and central Italy, with other financial centers such as Genoa and Venice, a first core area of ​​cashless payment transactions with an Italian character developed. In the 14th century the financial supremacy of the Florentines ended when Edward III. , the King of England, did not acknowledge his debts.

North of the Alps, the Nuremberg Stock Exchange served as a link in trade between Italy and other European economic centers. With the Banco Publico , one of the first giro banks was created in the financial center .

In the 17th century Amsterdam became the successor to Genoa. In contrast to the Italian city-state, Amsterdam was able to rely on the economy of a large-area state.

Within the next 200 years, Amsterdam lost its position to London . This followed from Britain's dominance in the economy in the 19th century through the Industrial Revolution , in the military after defeating Napoleon and the expansion of the British Empire, and from its lead in the development of banking and financial instruments (for example, checks ). Several other financial centers emerged in the 19th and 20th centuries, such as Geneva , Paris , Frankfurt am Main , Zurich and Milan , none of which could challenge London.

At the end of the 19th century brought Germany and the United States in the industry to the UK on. New York could not challenge London until the end of the First World War, and the Great Depression of 1929 interrupted the rise of New York, although London was also hit hard. After the Second World War, New York finally became the dominant financial center because it was the only major international financial center not directly affected by the war. New York could not hold this position for long. As early as 1958, London returned to the forefront of finance.

Nationally, Cologne's banking system gained great importance and made the city the most important German financial center during the French era up to the founding period .

In the 1980s, Japan was the only country able to export capital on a large scale. Normally, that should have resulted in Tokyo becoming the dominant financial hub in the world. However, the Japanese financial economy is less outward-looking than that of most other international financial centers. In addition, the bursting of the Japanese “soap bubble economy” has plunged the country's financial economy into a deep crisis.

Before the Second World War, Shanghai was the leading financial center in the Far East. The financial sector there was destroyed by the Second World War (1937 to 1945) and the civil war that followed (1946 to 1949). Until the beginning of the reform and opening policy in 1978, the communist government prevented Shanghai from rising again as an international financial center. Two new international financial centers emerged in the region after World War II: Hong Kong and Singapore .

supply and demand

On the demand side are domestic and transnational financial firms whose desire to expand and diversify is creating a demand for suitable urban facilities. Likewise, economic growth and expanding foreign trade lead to greater demand.

On the supply side, this demand can only be met by cities that invest heavily in the required infrastructure (airports, ports, roads, rail links, telecommunications, etc.), provide the financial sector with high-quality information infrastructure and limit popular resistance to gentrification .

List of the most important financial centers

The Global Financial Centers Index compares the competitiveness of 100 financial centers around the world based on 28,599 ratings from international financial players. The index is compiled by the Z / Yen Group and published semi-annually by the City of London Corporation . The following data is taken from the September 2018 index (Global Financial Centers Index 24).

The ranking results from the total of the five categories of people (availability of qualified workers, flexibility of the labor market, quality of training), economic framework conditions (legislation, taxes, corruption, freedom of trade), market access (trading in securities, range of different financial services ), Infrastructure (real estate prices, accessibility by public transport) and general competitiveness (price level, quality of life, economic climate).

The index also makes a classification according to whether financial centers are of global importance ( Global Centers ) or whether they are financial centers with only transnational importance ( Transnational Centers ) or local centers ( Local Centers ). There are further gradations in these categories.

• Financial centers of global importance
  • Worldwide importance is ascribed to 27 financial centers. These are in turn divided into four subcategories: Global Leaders (broad and established financial centers), Global Diversified (relatively broad financial centers), Global Specialists (more specialized financial centers) and Global Contenders (emerging financial centers).

• Financial centers with international significance
  • 34 financial centers are assigned a transnational significance. Subdivisions are made as to whether they are broadly based and established financial centers ( Established Transnational ), relatively broadly based ( Transnational Diversified ), more specialized ( Transnational Specialists ) or newly emerging financial centers ( Transnational Contenders ).

• Financial centers of local importance
  • 39 financial centers are of local importance for the respective state in which they are located. These are also divided into broadly based and established financial centers ( Established Players ), relatively broadly based ( Local Diversified ), more specialized ( Local Specialists ) or emerging financial centers ( Evolving Centers ).

For comparison, the data from the Global Financial Centers Index 8 March 2017 are shown.

Financial center	country	GFCI score 24	category	Change of rank GFCI 23	GFCI score 22
London	Great Britain	788	Global Leader	▬	794
New York City	United States	786	Global Leader	▲ 1	792
Hong Kong	Hong Kong	783	Global Leader	▬ 0	781
Singapore	Singapore	769	Global Leader	▲ 1	765
Shanghai	People's Republic of China	766	Global Leader	▲ 1	741
Tokyo	Japan	746	Global Leader	▼ 1	749
Sydney	Australia	734	Global Leader	▲ 2	724
Beijing	People's Republic of China	733	Global Leader	▲ 3	721
Zurich	Switzerland	732	Global Leader	▲ 7	713
Frankfurt am Main	Germany	730	Global Leader	▲ 10	708
Toronto	Canada	728	Global Leader	▼ 4	728
Shenzhen	People's Republic of China	726	Global specialist	▲ 6	710
Boston	United States	725	Transnational Diversified	▼ 3	722
San Francisco	United States	724	Established transnational	▼ 6	726
Dubai	United Arab Emirates	722	Global Leader	▲ 4	709
los Angeles	United States	721	Established transnational	▲ 1	712
Chicago	United States	717	Global Diversified	▼ 3	718
Vancouver	Canada	709	Transnational Diversified	▼ 3	717
Guangzhou	People's Republic of China	708	Established transnational	▲ 9	678
Melbourne	Australia	699	Established transnational	▼ 8	720
Luxembourg	Luxembourg	694	Global Contender	▼ 7	701
Osaka	Japan	693	Established player	▲ 1	692
Paris	France	691	Global Leader	▲ 1	687
Montreal	Canada	690	Established transnational	▼ 11	719
Tel Aviv	Israel	689	Established player	▲ 9	661
Abu Dhabi	United Arab Emirates	686	Global Leader	▼ 1	683
Geneva	Switzerland	685	Established transnational	▼ 1	682
Casablanca	Morocco	684	Transnational Specialist	▲ 4	664
George Town	Cayman Islands ( BOT )	683	Transnational Specialist	▼ 7	700
Hamilton	Bermuda ( BOT )	680	Evolving Center	▲ 6	656
Qingdao	People's Republic of China	679	Global Contender	▲ 2	662
Taipei	Taiwan	670	Local specialist	▼ 2	673
Seoul	South Korea	668	Global Leader	▼ 6	679
Doha	Qatar	662	Transnational Contender	▲ 13	617
Amsterdam	Netherlands	657	Transnational Diversified	▲ 15	613
Lille	France	655	Global Diversified	▲ 12	616
Dublin	Ireland	652	Global Leader	▼ 6	666
Cape Town	South Africa	651	Local specialists	▲ k. A.	k. A.
Munich	Germany	639	Established transnational	▼ 4	660
Kuala Lumpur	Malaysia	638	Established transnational	▬ 0	632
Hamburg	Germany	636	Established player	▼ 12	676
Calgary	Canada	635	Transnational Diversified	▼ 4	642
Edinburgh	Great Britain	634	Transnational Specialist	▬ 0	628
Busan	South Korea	631	International Contenders	▲ 2	618
Wellington	New Zealand	630	Local diversified	▼ 1	621
Monaco	Monaco	629	Local specialist	▲ 8	604
Saint Helier	Jersey ( CD )	628	Local specialist	▲ 1	637
Bangkok	Thailand	626	Established player	▼ 11	634
Port Louis	Mauritius	625	Local specialist	▲ 13	601
Glasgow	Great Britain	622	Local specialist	▼ 1	614
Vienna	Austria	621	Transnational Diversified	▲ 13	583
Tallinn	Estonia	620	Local specialist	▲ 27	559
Madrid	Spain	619	Global Diversified	▼ 12	631
Brussels	Belgium	617	Transnational Diversified	▲ 8	592
São Paulo	Brazil	616	Established player	▲ 12	574
Milan	Italy	613	Global Diversified	▲ 5	593
Johannesburg	South Africa	612	Transnational Diversified	▼ 5	610
Stockholm	Sweden	611	Local diversified	▼ 16	629
Manama	Bahrain	607	Transnational Specialist	▼ 8	612
St. Peter Port	Guernsey ( CD )	603	Transnational Contender	▼ 7	605
Nur-Sultan	Kazakhstan	599	Global specialist	▲ 7	548
Mexico city	Mexico	598	Local specialist	▲ 8	569
Road Town	British Virgin Islands ( BOT )	597	Transnational Contender	▼ 3	594
Oslo	Norway	596	Established transnational	▼ 8	602
Rio de Janeiro	Brazil	594	Established transnational	▲ 1	557
Warsaw	Poland	592	Established transnational	▼ 21	620
Nassau	Bahamas	591	Local specialist	▼ 8	596
Istanbul	Turkey	590	Established transnational	▲ 8	562
Riad	Saudi Arabia	588	Transnational Specialist	▼ 1	573
Lisbon	Portugal	585	Local diversified	▲ 4	564
Budapest	Hungary	584	Local diversified	▲ 18	623
Rome	Italy	583	Local diversified	▼ 7	579
Vaduz	Liechtenstein	582	Local specialist	▼ 4	570
Prague	Czech Republic	581	Established player	▼ 3	567
Gibraltar	Gibraltar ( BOT )	580	Transnational Specialist	▼ 9	576
Jakarta	Indonesia	579	Local specialist	▲ 14	546
Gujarat International Finance Tec-City	India	578	International Contenders	▲ k. A.	k. A.
Tianjin	People's Republic of China	577	Evolving Center	▼ 15	588
Cheng you	People's Republic of China	576	Transnational Specialist	▲ 3	556
St. Petersburg	Russia	575	Local specialist	▲ 11	531
Copenhagen	Denmark	573	Transnational Diversified	▼ 23	599
New Delhi	India	572	Transnational Contender	▼ 4	560
Moscow	Russia	571	Global Diversified	▬ 0	555
Reykjavík	Iceland	570	Local specialist	▲ 9	521
Douglas	Isle of Man ( CD )	568	Transnational Contender	▼ 28	600
Manila	Philippines	566	Local specialist	▼ 2	554
Riga	Latvia	565	Evolving Center	▬ 0	551
Valletta	Malta	564	Evolving Center	▲ 8	561
Hangzhou	People's Republic of China	563	International Contenders	▲ k. A.	k. A.
Panama City	Panama	562	Local specialist	▼ 10	558
Nicosia	Cyprus	560	Evolving Centers	▼ 19	566
Mumbai	India	558	Local diversified	▼ 19	565
Buenos Aires	Argentina	557	Transnational Specialist	▼ 18	563
Helsinki	Finland	556	Local diversified	▼ 9	553
Baku	Azerbaijan	555	Evolving Center	▬ 0	511
Almaty	Kazakhstan	550	Evolving Center	▼ 2	519
Sofia	Bulgaria	544	Local specialists	▲ k. A.	k. A.
Athens	Greece	518	Local diversified	▼ 6	525
Port of Spain	Trinidad and Tobago	510	Evolving Centers	▼ 13	552
Dalian	People's Republic of China	499	Transnational Contender	▼ 4	501

More ranking lists

All cities that are listed in at least two of the four rankings and that are also listed in at least two of the four rankings in a place within the top 30 are listed. London and New York City enjoy an outstanding position, they can always be found among the top three financial centers. The Asian financial centers Tokyo and Hong Kong also regularly make it into the top 10 , followed by Singapore , Shanghai and Seoul . In Europe, Paris , Frankfurt am Main , Zurich and Amsterdam are among the leading financial centers. In North America, Chicago , Toronto and Boston regularly follow New York. Sydney is the most important financial center in Australia.

Financial center	country	International Financial Centers Development Index (2012)	World's most economically powerful cities (2008)	Worldwide Centers of Commerce Index (2008)	Global Financial Centers Index (2013)
Amsterdam	Netherlands	15th	-	10.	45.
Boston	United States	19th	-	21st	07.
Brussels	Belgium	23.	-	30th	60.
Chicago	United States	12.	05.	05.	14th
Dubai	United Arab Emirates	14th	-	44.	25th
Frankfurt am Main	Germany	07.	-	08.	09
Geneva	Switzerland	16.	-	40.	08.
Hong Kong	Hong Kong ( SAR )	04.	02.	06.	03.
Copenhagen	Denmark	20th	-	14th	49.
London	United Kingdom	02.	01.	01.	01.
los Angeles	United States	-	08.	17th	-
Luxembourg	Luxembourg	26th	-	-	13.
Munich	Germany	21st	-	27.	34.
New York City	United States	01.	03.	02.	02.
Osaka	Japan	38.	-	19th	30th
Paris	France	05.	07.	07.	29
San Francisco	United States	17th	-	28.	12.
Seoul	South Korea	31.	06.	09	10.
Shanghai	People's Republic of China	08.	09	24.	16.
Singapore	Singapore	06.	-	04.	04.
Stockholm	Sweden	25th	-	16.	37.
Sydney	Australia	10.	-	12.	15th
Tokyo	Japan	03.	04.	03.	05.
Toronto	Canada	18th	10.	13.	11.
Vancouver	Canada	24.	-	37.	19th
Washington, DC	United States	09	-	36.	17th
Vienna	Austria	27.	-	26th	20th
Zurich	Switzerland	11.	-	15th	06.

Financial centers in Germany

The financial center Frankfurt am Main has an outstanding position in Germany and is one of the most important financial centers worldwide. Frankfurt's leading position is characterized by the high concentration of companies in the financial sector: In addition to the largest German stock exchange ( Frankfurt Stock Exchange ), the most important major German banks ( Deutsche Bank , Commerzbank , DZ Bank , KfW Bankengruppe , DekaBank ), investment companies (Allianz Global Investors Europe, DWS Investments , Union Investment ) and auditing companies ( PricewaterhouseCoopers or KPMG ), as well as numerous branches of foreign banks and other international financial service providers. Frankfurt is also the seat of the European Central Bank , the Deutsche Bundesbank , the Federal Financial Supervisory Authority (BaFin) and the European Insurance Supervisory Authority (EIOPA).

The Munich financial center is one of the world's leading insurance locations , as the industry heavyweights Allianz and Munich Re are based here. Munich is less characterized by financial institutions than by large industrial companies such as BMW , Siemens , MAN , but some important German banks ( HypoVereinsbank , BayernLB ) are also based here.

The financial center of Hamburg is the location in Germany with the greatest density of private banks, the seat of the largest German savings bank ( Hamburger Sparkasse ) as well as a stronghold for special insurance and the seat of important private ( HanseMerkur ) and statutory health insurance companies ( DAK , Techniker ). Historically, Hamburg is also the seat of the oldest stock exchange in Germany , the oldest private bank in Germany ( Berenberg ), the oldest insurer in the world ( Hamburger Feuerkasse ) and the first savings bank in Germany .

The Stuttgart financial center focuses on the areas of SME financing, old-age provision and private capital investments. In addition to the largest German Landesbank ( LBBW ), Stuttgart is home to the largest exchange for securitized derivatives in Europe ( Börse Stuttgart ) and the L-Bank , one of the largest European development banks.

The Düsseldorf financial center is the largest location for financial services in North Rhine-Westphalia and has numerous banks in the private banking sector and is the most important location in Germany for Japanese foreign banks . The largest German state development bank NRW.BANK is also based in Düsseldorf. After all, Düsseldorf is an important location for insurance companies such as the ERGO insurance group , Provinzial Rheinland and ARAG .

See also

• Offshore financial center
• Cosmopolitan city
• Global City
• Frankfurt am Main financial center
• Düsseldorf financial center
• Hamburg Financial Center (Association)
• London financial center
• Initiative Finanzstandort Deutschland IFD, state-private sector cooperation

literature

• Merki, Christoph Maria (ed.): Europe's financial centers. History and importance in the 20th century . Frankfurt a. M./New York 2005, ISBN 3-593-37743-8

Individual evidence

1. ↑ Jürgen Krumnow / Ludwig Gramlich / Thomas A. Lange / Thomas M. Dewner (eds.), Gabler Bank-Lexikon: Bank - Börse - Financing , 2002, p. 311
2. ↑ Robert Traba / Bartosz Dziewanowski-Stefanczyk (eds.), Wirtschaftsgeschichte , 2013, p. 199
3. ^ Report in the FAZ: Index is published by the London-based analysis company Z / Yen Group and the China Development Institute
4. ↑ ^{a b} The Global Financial Centers Index 24. Retrieved January 11, 2019 . 
5. ↑ Xinhua-Dow Jones International Financial Centers Development Index 2012 (PDF; 2.5 MB)
6. ^ Forbes World's most economically powerful cities 2008
7. ↑ Mastercard Worldwide Centers of Commerce Index 2008 (PDF; 844 kB)
8. ↑ The Global Financial Centers Index 14 ( Memento from September 4, 2015 in the Internet Archive ) (PDF; 2.2 MB)