Cayman slips down global ranking

Part 1:

Cayman slips down global ranking

The latest Global Financial Centres Index released in September indicate that the Cayman Islands has sunk four places in the global rankings since the last Index was released, to a placement of 26th out of 75 financial centres. Business Editor Lindsey Turnbull reports on the findings of this latest Index. Second in a two-part series.

Mixed fortunes for North American and Europe
North America as a region performed relatively well in this GFCI 6, with Chicago the number two NA centre after New York, ranked in eighth place. Toronto has overtaken Boston as the third NA centre, in thirteen place (Boston is now in 18th, with San Francisco just beating it as well at 17th place).

Several European centres have seen strong improvements in their ratings, namely Paris (19th), Munich (30th) and Madrid (40th) while Dublin (down to 23rd place from 10th) and Glasgow (down to 49th from 31st) have seen significant drops in their ratings. Zurich and Geneva both remain in the GFCI 6 top ten (sixth and ninth respectively) and the report notes that both Swiss centres have remained strong in asset management and private banking.

Industry sectors
Breaking down industry sectors into sub-indices for which respondents working in those relevant sectors have their say means the Index can clearly reflect which centres respondents believe are at the top of their game. The industry sectors are broken down as follows: asset management, banking, government and regulatory, insurance and professional services. London and New York lead each sector, with London at number one for every sector apart from banking, for which it is pipped by New York.  Hong Kong and Singapore rank third and fourth (Hong King is third in asset management, banking and insurance, Singapore third in government and regulatory and professional services). Asian centres have again made tremendous jumps when viewed in this way, for example Shanghai is up 39 places to sixth in insurance, Beijing is up 44 places to ninth (insurance also) and Shanghai is up 29 places to seventh place in banking. Newcomer Shenzhen moved straight into fifth place (banking and insurance).

Key areas of competitiveness
The instrumental factors used in the GFCI are grouped in five areas of competitiveness – people, business environment, market access, infrastructure and general competitiveness.

Most of the competitiveness sub indices reflect that of the overall Index, with London topping the list every time, New York coming in second, Hong Kong third and Singapore fourth. Tokyo has made great strides, moving up 17 places to ninth in the business environment sub-sector, 13 places to seventh in the market access, ten places to sixth in the people sub-sector and seven places to seventh in general competitiveness. Sydney has made the top ten for the first time, moving up five places to eighth in the business environment sub-sector. Paris has also made strides, moving 17 places to tenth in general competitiveness.

Instrumental factors
A key component of the areas of competitiveness sub indices are the 64 instrumental factors that are incorporated into the GFCI, selected specifically to represent the factors that make a centre competitive in financial services. Lifestyle assets leads the table, followed in descending order by: Mastercard centres of commerce, world competitiveness score board, global competitiveness index and intellectual capital. Quality of roads features highly as well, as does the business environment and foreign direct investment inflows.

The report states: “It is interesting to see that the broader measures of competitiveness seem to act as good indicators for financial centre competitiveness. The six most highly correlated instrumental factors are all broad measures of competitiveness rather than being specific to financial services. This indicates that cities that are successful at most things are likely to be very competitive financial centres.”