The term “financial centers” usually refers to the cities with the concentration of banking organizations and financial institutions. Financial centers have a significant impact on currency rates, because they are the largest trading platforms.
What do world financial centers do?
As already was noted, the world’s financial centers are powerful regulators of world financial flows. However, this is not the only function of such centers. We can also mention the following:
- Analysis and processing of information. Financial centers usually cooperate with well-known consultants, such as the firm McKinsey, and financial experts that allows a qualitative analysis of the markets and to predict them accurately.
- Strengthening the global financial system. Together with the leading market players, world financial centers are engaged in planning and development of management strategies for the global financial system and its control.
- The restructuring of public debt. World financial centers manage international debt and structure debt of the states in the way that its payment does not affect the domestic economy. This is another way to ensure the stability of the global financial system.
Biggest financial centers
Which of financial centers are the most influential at the moment can be judged on the basis of this table:
London occupies the leading position due to several reasons, including:
– Quite liberal legislation;
– Proximity to the EU markets;
– Low income tax;
– Developed transport infrastructure.
In favor of this financial center speaks at least the presence of the exchange “paradise” Wall-street, as well as the largest stock exchanges NASDAQ and NYSE.
The second largest US financial center. Financial services here are one of the most important components of the national economy.
The economy of Chicago is very stable and is one of the most dynamic in the world.
Leading financial center of Asia. The results of the Asian trading sessions depend on the activities of stock exchanges in Hong Kong by 90%.
The Swiss financial center, of course, is based on the banking system. Zurich is the most “bourgeois” of all financial centers, here only the wealthiest clients are served.
Which of the financial centers is the most attractive?
Every trader has their own point of view as for which one financial center plays the most important role and is developing more actively than the others. One of the most experienced and leading analysts Jim Rogers, for example, advises to pay attention to Singapore, and with him, by the word, agree a lot of experts.
As a financial center (as well as in other capacities) Singapore develops with enormous speed. Singapore’s economy is very “generous”: the income tax here is one of the lowest in Asia, while the interest rate of banks on deposits is quite high. Thus, the government is encouraging the citizens to resort to bank institutions.
There are, of course, disadvantages, such as a large number of immigrants, for example, but many of them make a no smaller contribution to the development of the country than natives. Singapore is now called the “Switzerland of Asia”, and it has all the prerequisites to get on a level with the real one.
At this point in the 13 largest world centers more than 1000 branches and offices of the world’s largest banks are located, which, of course, affects the market.
That’s all for now. Got any questions? Just ask the expert!