The City of London, England is composed almost entirely of financial service companies.

A financial centre is a global city that is home to a large number of internationally significant banks, businesses, and stock exchanges.

An international financial centre is a non-specific term usually used to describe an important participant in international financial market trading. An international financial centre (sometimes abbreviated to IFC) will usually have at least one major stock market.

International Financial Centres Development Index[link]

The New York Stock Exchange, the world's largest stock exchange per total market capitalization of its listed companies.^[1]

In 2011, the Xinhua News Agency of China, partnering with the Chicago Mercantile Exchange and Dow Jones & Company of the United States, released the Xinhua-Dow Jones International Financial Centers Development Index. According to this index, the top ten financial centers in the world are:^[2]

1.	London
2.	New York City
3.	Tokyo
4.	Hong Kong
5.	Singapore
6.	Shanghai
7.	Paris
8.	Frankfurt
9.	Sydney
10.	Amsterdam

Global Financial Centres Index[link]

The London Stock Exchange

The Global Financial Centres Index is compiled by the London-based British think-tank Z/Yen and is published annually by the City of London Corporation.^[3] As of 2012, the top ten financial centres according to the Global Financial Centres Index in the world are:^[4]

1.	London
2.	New York City
3.	Hong Kong
4.	Singapore
5.	Tokyo
6.	Zurich
7.	Chicago
8.	Shanghai
9.	Seoul
10.	Toronto

Comparisons[link]

Wall Street, the center of American finance.

• Wall Street. During much of the 20th century, the United States and its financial capital of New York City were the leaders. But over the past few decades, with the rise of a multipolar world with new regional powers and global capitalism, numerous financial centres have challenged Wall Street's predominance, particularly from Asia which some analysts believe will be the focus of new worldwide growth.^[5] New York still has strengths in having a "concentration of finance professionals" -- prime brokers, large banks, traders, lawyers, accountants, and private bankers.^[6] One analyst suggested the prime factors for success as a financial city were three:

1. a pool of money to lend or invest
2. a decent legal framework
3. high-quality human resources^[7]

• London. Some reports have suggested that the City of London has overtaken New York as a world financial capital.^[8] London's merger volume was higher than New York's by $79 billion in 2005 and equity issuance was $130 billion versus $105 billion in the United States.^[9] Companies seeking to list their stocks have started going to London before New York.^[10] There is a perception that "regulatory scrutiny is more burdensome in the United States than in London"^[6][10], which has a "transparent and reliable legal system."^[11] One report suggested that London's location between Asia and the U.S. meant that it was particularly suitable when taking into account time zones.^[11] American organisations have often sent employees to work in London, and one 2008 estimate suggested that there were approximately 224,000 American workers in Britain.^[12]

Skyline of Shinjuku in Tokyo, Japan.

• Tokyo. One report suggests that Japanese authorities are working on plans to transform Tokyo but have met with mixed success, noting that "initial drafts suggest that Japan’s economic specialists are having trouble figuring out the secret of the Western financial centers’ success."^[13] Efforts include more English-speaking restaurants and services and earthquake-resistant offices, but that have neglected more powerful stimuli such as lower taxes and a deep-seated aversion to finance.^[13]

• Hong Kong. In 2010, the Hong Kong Stock Exchange raised nearly $53 billion for initial public offerings, compared with only $42 billion for the U.S. and $16 billion (£10 billion) in London.^[10][14] Hong Kong was the site of the world's largest I.P.O. in 2006 of the $19.1 billion Industrial and Commercial Bank of China.^[6] Hedge funds are doing well in Hong Kong with increased growth from 2006 to 2010.^[14] One estimate in 2009 was that the Hong Kong stock market was the world's seventh largest and noted that 70 percent of the world's 100 largest banks were based in the city.^[15]

• Singapore. This city was mentioned as a competitor given its proximity to Asian markets.^[11]

• Chicago. The Illinois city has the "world’s largest derivatives market" when the Chicago Mercantile Exchange and the Chicago Board of Trade merged in 2007.^[10]

• Shanghai. Official efforts have been directed to making Pudong a financial leader by 2010.^[16] Efforts during the 1990s were mixed, but in the early 21st century, Shanghai gained ground. Factors such as a "protective banking sector" and a "highly restricted capital market" have held the city back, according to one analysis in 2009 in China Daily.^[17] Shanghai has done well in terms of market capitalization but it needs to "attract an army of money managers, lawyers, accountants, actuaries, brokers and other professionals, Chinese and foreign," to enable it to compete with New York and London.^[18] China is generating tremendous new capital, which makes it easier to stage initial public offerings of state-owned companies in places like Shanghai.^[6]

• Toronto. The city is a leading market for Canada's largest financial institutions and large insurance companies. It has also become one of the fastest growing financial centres following the late-2000s recession and the stability of the Canadian banking system. Most of the financial industry is concentrated along Bay Street, where the Toronto Stock Exchange is also located.

• Others. Cities such as São Paulo and Johannesburg and other "would-be hubs" lack liquidity and the "skills base," according to one source.^[7] Financial industries in countries and regions such as the Indian subcontinent, Korea and Malaysia require not only well-trained people but the "whole institutional infrastructure of laws, regulations, contracts, trust and disclosure" which takes time to happen.^[7] *

New York Times analyst Daniel Gross wrote:

An example is the alternative trading platform known as BATS based in Kansas City which came "out of nowhere to gain a 9 percent share in the market for trading United States stocks."^[6] The firm has computers in New Jersey, two salespersons in New York City, but the remaining 33 employees work in a centre in Missouri.^[6]

Offshore financial centres[link]

A Bermudian banknote. Bermuda is a well known offshore financial centre.

An offshore financial centre, although not precisely defined, is usually a small, low-tax jurisdiction specialising in providing the corporate and commercial services to non-residents in the form of offshore companies and the investment of offshore funds.

The term offshore financial centre is a relatively modern neologism, first coined in the 1980s.^[19] Although the terms are not synonymous, many leading offshore finance centres are regarded as "tax havens", and the lack of precise definitions often leads to confusion between the concepts. In Tolley's International Initiatives Affecting Financial Havens^[20] the author in the Glossary of Terms defines an "offshore financial centre" in forthright terms as "a politically correct term for what used to be called a tax haven." However, he then qualifies this by adding "The use of this term makes the important point that a jurisdiction may provide specific facilities for offshore financial centres without being in any general sense a tax haven."

In 2009 the International Financial Centres Forum (IFC Forum) was established by a group of professional service firms and businesses with offices in the leading offshore centres.^[21] According to its website, the IFC Forum aims to provide authoritative and balanced information about the role of the small international financial centres in the global economy.

References[link]

External links[link]

• The Competitive Position of London as a Global Financial Centre
• International financial centres

Mark Carney
8th Governor of the Bank of Canada
Incumbent
Assumed office February 1, 2008
Appointed by	Stephen Harper
Preceded by	David A. Dodge
Chairman of the Financial Stability Board
Incumbent
Assumed office 4 November 2011
Preceded by	Mario Draghi
Personal details
Born	Mark J. Carney (1965-03-16) March 16, 1965 (age 47) Fort Smith, Northwest Territories
Nationality	Canada
Spouse(s)	Diana Carney (4 children)
Alma mater	Harvard University Nuffield College, Oxford
Occupation	Economist

Mark J. Carney (born March 16, 1965) is the eighth and current governor of the Bank of Canada and the Chairman of the Financial Stability Board, an institution of the G20 based in Basel, Switzerland.^[1] These appointments were on October 4, 2007 (for a seven-year term), and on November 4, 2011 (for a three-year term).^[2][3] Carney achieved these positions by working his way up the ranks of Goldman Sachs, the Canadian Department of Finance, and the Bank of Canada as Deputy Governor. Carney has been credited with shielding Canada from the worst effects of the late-2000s financial crisis, and has earned recognition by the Financial Times and TIME magazine as a top figure in the financial world.

Early life[link]

Mark Carney was born in Fort Smith, Northwest Territories. His father Bob was a high school principal there, and later a professor of education at the University of Alberta in Edmonton, Alberta, where the family moved when Carney was six years old. Carney has three siblings — older brother Sean, younger brother Brian and sister Brenda. His mother Verlie was an elementary school teacher before having her children. Carney and his brothers all studied at Harvard University.^[4]

Carney completed a bachelor's degree in economics from Harvard in 1988. He later attended Nuffield College, Oxford, where he received a master's in economics in 1993 and a doctorate in economics in 1995.^[5]

Career[link]

Goldman Sachs[link]

Before joining the Canadian public service, Carney spent thirteen years with Goldman Sachs in its London, Tokyo, New York and Toronto offices. His progressively more senior positions included co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking. He worked on South Africa's post-apartheid venture into international bond markets, and was involved in Goldman's work with the 1998 Russian financial crisis.^[4]

Goldman's role in the Russian crisis was criticized at the time because while the company was advising Russia it was simultaneously betting against the country's ability to repay its debt.^[6]

Department of Finance[link]

Between November 2004 and October 2007 Carney was senior associate deputy minister, and G7 deputy, at the Canadian Department of Finance. He served under Liberal finance minister Ralph Goodale and Conservative finance minister Jim Flaherty. During that time Carney oversaw the government's controversial plan to tax income trusts at source.^[7]

Carney was also the "point man" in the government's profitable sale of its 19 percent stake in Petro-Canada.^[8][9]

Bank of Canada[link]

Deputy governor, 2003-2004[link]

Carney first joined the Bank of Canada as a deputy governor on August 5, 2003.^[10] About a year later he was seconded to the federal Department of Finance as senior associate deputy minister of finance, effective November 15, 2004.^[11]

Mark Carney at the 2010 World Economic Forum, Davos, Switzerland

Governor, 2008-present[link]

Carney returned to the Bank in November 2007 after his appointment as Governor, and served as advisor to retiring Governor David Dodge before formally assuming Dodge's job on February 1, 2008.^[2] Carney was selected over Paul Jenkins, the Senior Deputy Governor, who had been considered the front-runner to succeed Dodge.^[12] Carney took on this role during the depths of the recent global financial crisis. At the time of his appointment, Carney was the youngest central bank governor among the G8 and G20 groups of nations.^[13]

The financial crisis[link]

Carney's actions as the Bank of Canada's governor are said to have played a major role in helping Canada avoid the worst impacts of the recent global financial crisis.^[14][15] The Canadian economy outperformed those of its G7 peers during the crisis, and Canada was the first G7 nation to have both its GDP and employment recover to pre-crisis levels.

The Bank's decision to provide substantial additional liquidity to the Canadian financial system,^[16] and its unusual step of announcing a commitment to keep interest rates at their lowest possible level for one year,^[17] appear to have been significant contributors to Canada's weathering of the crisis.^[18]

Canada's risk-averse fiscal and regulatory environment is also cited as a factor. In 2009 a Newsweek columnist wrote, "Canada has done more than survive this financial crisis. The country is positively thriving in it. Canadian banks are well capitalized and poised to take advantage of opportunities that American and European banks cannot seize."^[19]

Financial Stability Board[link]

On November 4, 2011, Carney was named chairman of the Basel-based Financial Stability Board. In a statement, Carney credited his appointment to "the strong reputation of Canada's financial system and the leading role that Canada has played in helping to develop many of the most important international reforms." The three-year term is a part-time commitment, allowing Carney to complete his term at the Bank of Canada. While there has been no indication of his priorities as chairman, on the day of his appointment the Board published a list of 29 banks that were considered sufficiently large as to pose a risk to the global economy should they fail.^[20][21]

Recognition[link]

Carney has earned various accolades for his leadership during the financial crisis. He was named one of the Financial Times' Fifty who will frame the way forward,^[22] and of Time magazine's 2010 TIME 100.^[23] In May 2011 Reader's Digest magazine named him Editor's Choice for Most Trusted Canadian.^[24]

He sits on the board of directors of the Bank for International Settlements and is chairman of its Committee on the Global Financial System.^[25] Carney is also a member of the Group of Thirty, an international body of leading financiers and academics.^[26]

Personal life[link]

Carney married his wife Diana, an economist specializing in developing nations, while he was finishing his doctoral thesis in the mid-1990s. They have four daughters and live in the Rockcliffe Park neighbourhood in Ottawa.^[4]

During his Harvard years, Carney was back-up goalie for the school's hockey team.^[27]

References[link]