Source: Z/Yen Group, Global Financial Centers Index, 2021.
Note: The index considers five major factors; human resources, the business environment, market access, infrastructure (e.g. real estate), and general competitiveness.
The global economy and its commercial geography are coordinated by major financial centers, many of which correspond to the most important cities in the world in terms of economic, financial, and political influence. Cities are important drivers of global commercial activity since they are locations where decisions are made regarding investment and the management of trade flows. They are also conductive of innovation, have a strong institutional setting, high productivity, and high wages. The most important consumer markets are also found in prominent commercial centers. Due to the overlapping of market opening hours across several time zones, it becomes possible for financial markets to trade 24 hours per day as one market closes, another takes over. Telecommunications make this process virtually instantaneous. Major financial centers usually correspond to global cities managing the capital of their economic spheres. Most North American (e.g. New York, Boston), European (London, Geneva, Zurich), and Asian (Beijing, Shanghai, Tokyo, Seoul, Hong Kong, Singapore) financial centers are linked with the commercial activities of their regions.
A significant cluster has recently emerged in the Middle East (e.g. Dubai, Abu Dhabi, Doha), with centers mainly managing the wealth generated by petroleum exports, with the setting of large sovereign wealth funds. They are also dominant offshore centers having financial importance unrelated to their economic importance or even their connectivity to the global trade network. These offshore financial centers are offering tax advantages, such as little or no capital gain taxes, several operating niche activities such as insurance, banking, ship registry, or fund management. Among the most noticeable are small nation-states at the periphery of Europe (e.g. Jersey, Guernsey, Isle of Man, Malta, Gibraltar, Cyprus) or in the Caribbean (e.g. Bermuda, Bahamas, Panama, Cayman Islands).