A research paper, financed by Australia’s CIFR (“Centre for International Finance and Regulation”) and prepared with the – clearly ultimate – purpose of promoting Sydney as an International Financial Centre (IFC), was presented at a Sydney seminar on 8 December. The authors made the bizarre suggestion that the NSW State Government “focus on initiatives that drive population growth” so that Sydney can become a more important IFC. More precisely, they suggested that Parramatta (a suburban area of the larger Sydney geographical region) be more closely incorporated into the Sydney CBD (central business district) area to contribute to building a “mega” city that could be more highly ranked as an IFC. The authors of the report, somewhat strangely, began their presentation with a video clip of […]
I have been reading a thought provoking paper by Sue Lyn Stubbs on the future of Hong Kong as an IFC, but which is also highly relevant to Shanghai. She suggests the planned creation of “The China Network” IFC (which would include Shanghai) rather than any one city dominating the East Asia region and time zone (as London and New York dominate theirs). Stubbs is optimistic about the future of Hong Kong as an IFC. She puts up a good argument, but I think she is WRONG! In my view, Hong Kong does NOT have a great future. Moreover, China will seek to reduce the role of the English language and English based common-law in the international financial system. The […]
Where should HSBC locate its headquarters? Following HSBC’s threats to move it headquarters from London, I sent out a survey to over 1000 email addresses, and 25 responded (a response rate of 2.5%). Half (ie 13) of who responded were HSBC clients. For many people (particularly those who were not clients of HSBC) the survey was not at all interesting. One sent back an email saying that he would not be completing the survey, and tartly commented on the issue of HSBC headquarters location: “Do you think we care?” The overwhelming majority of people who completed the survey worked in the “banking, finance, investment” or “professional services” sectors. The geographical locations of respondents were: Middle East (7); Australia (6); SE Asia (4); […]
An early 2007 report, entitled “Sustaining New York’s and the US’ Global Financial Services Leadership”, prepared by McKinsey & Company noted in the Executive Summary that while it “considers a broad definition of financial services – including retail and corporate banking, securities, and insurance – it focuses primarily on US competitiveness in the securities and investment banking sectors, where competition among global financial centers is most intense”. The US has a very large economy and much of New York’s huge amount of financial services activity will relate to that economy. However, the above quote from McKinsey implies that there are certain areas (eg securities and investment banking) where activity may be more or less than what one would expect given […]
Sometimes the conditions for the formation of today’s top IFCs happened organically and largely because of the related domestic markets (eg New York); sometimes the conditions were a combination of originally organic growth because of the related domestic market combined with luck (ie common language and legal system with its successor) and then sure-footedness (eg London); sometimes a combination of being an international trade hub, luck (ie language and legal system) and sure-footedness (eg Hong Kong and Singapore); and sometimes as a very conscious and precise government decision (eg Dubai).