Factors of Successful Financial Centers

The Business Dictionary defines a financial center as a city or district that has a heavy concentration of financial institutions that offer a highly developed commercial and communications infrastructure and where great number of domestic and international trading transactions are conducted. Moreover, a global financial center is a concentration of an extensive variety of international financial businesses and transactions in one location. With there being many financial centers around the world competing to be the prevalent and most predominant of its counter-peers, one must consider the factors that wean out the leaders. A report written by the Centre for the Study of Financial Innovation comprised factors such as regulatory competence, tax regime, skilled labour, government responsiveness, regulatory “touch” and living environment as the six main elements a leading global financial center must keep precedent. Recently, innovative technology and improved communications infrastructure have minimized the need to be close to financial markets and companies are becoming more skilled at managing operations remotely. According to the Global Financial Centres Index, the world’s premier financial centers as of 2013 are London (United Kingdom), New York (United States) and Hong Kong. (Asia). Known as International Financial Centers “IFCs”, the IMF has defined London, New York and Hong Kong as large international full-service centers with advanced settlement and payments systems that support large domestic economies, have deep and liquid markets where both sources and uses of funds are diverse, and where legal and regulatory frameworks are adequate to safeguard the integrity of principal-agent relationships and supervisory functions.

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...orably and many thus feel that a similar project would help other areas of the world.

New World Encyclopedia states, “The Organization for European Economic Cooperation had taken the leading role in allocating funds, and the (ECA) arranged for the transfer of the goods. The American supplier was paid in dollars, which were credited against the appropriate European Recovery Program funds. The European recipient, however, was not given the goods as a gift, but had to pay for them in local currency, which was then deposited by the government in a counterpart fund. This money, in turn, could be used by the ERP countries for further investment projects. Most of the participating ERP governments were aware from the beginning that they would never have to return the counterpart fund money to the U.S.; it was eventually absorbed into their national budgets and "disappeared."