The New Financial international financial centres index

The US and the UK remain the world’s only two truly global financial centres based on the hard value of market activity.  The US comfortably claims the top spot in international and domestic financial activity, while international activity plays a much more significant role in the UK than the City of London’s function as a hub for domestic investment. Small, specialised centres and large emerging economies have increased their importance as financial centres over the past 10 years.

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Measuring what counts A number of publications rank and benchmark global financial centres on a regular basis. They enrich the debate on the global competitiveness of finance hubs such as New York, London, Hong Kong, or Singapore; and their results are closely watched by finance ministries, trade and investment departments, regulators, promotional bodies, and the industry around the world. Without wanting to disregard their calculations and the effort that goes into producing them, we think there are a few problems with existing indices. They often conflate the international and the domestic side of a financial centre; they place too much emphasis on not entirely reliable qualitative metrics; they rely on perception-based assessments; and they produce results that sometimes feel just a little bit off (‘London is the number one financial centre in the world’, or ‘London is only one point behind New York’, or ‘Frankfurt is just 10 points behind London’). This is why our index is trying to do something different. New Financial’s international financial centres index is based on a unique methodology that solely measures the actual value of market activity in any given financial centre, and that differentiates between international and domestic financial activity. We do not incorporate qualitative metrics into our rankings, and we do not create a single ranking of financial centres based on the sum or the average of international and domestic financial activity. We believe that the actual value of market activity that is taking place in a financial centre across every sector of banking, finance, and the capital markets is the single best indicator of a financial centre’s success and competitiveness. The more activity there is in any given centre, the more attractive it must be in aggregate to do business from there. This is particularly true when it comes to international financial activity, where firms have a choice where to locate it.

Here is a 10-point summary of this report:

1. What we are measuring: New Financial’s international financial centres index is based on a unique methodology that solely measures the actual value of market activity in any given financial centre, and that differentiates between international and domestic financial activity. We do not incorporate qualitative metrics into our rankings, and we do not create a single ranking across international and domestic activity.

   
   

2. An important distinction: unlike many other rankings of financial centres, our index clearly differentiates between international and domestic financial activity. Successful international financial centres with small domestic markets, or large economies with large domestic markets but a small international role, would get an unfair advantage or disadvantage if we measured all financial activity with a blanket approach.

   
   

3. The top international financial centres: the US and the UK are the only two truly global financial centres, followed by Hong Kong. The US’s top spot is unrivalled, and while the difference in international financial activity between the US and the UK is significant, it is much smaller than between the UK and Hong Kong.

   
   

4. The ‘internationalness’ of financial centres: the US is the largest international financial centre in the world, but international cross-border financial flows play a relatively more significant role in the UK, Hong Kong, and Luxembourg, where around half of all financial activity is international (in those sectors where we were able to measure it). In the US, international financial activity ‘only’ accounts for a quarter of all financial flows.

   
   

5. The largest domestic financial centres: the US is by some distance the largest domestic financial centre in the world. The US has twice as much domestic financial activity as China (the second-largest market), and more than six times as much as Japan (the third-largest). The UK, in fourth place, is a significantly less important financial centre in domestic activity than it is in international activity.

   
   

6. A focus on Europe: the UK is the largest international and domestic financial centre in Europe, but its lead is more pronounced in international financial activity than it is in our domestic ranking. The UK is more than four times as large as the second-largest international financial centre in Europe (Germany) but only just ahead of France in our domestic ranking. Luxembourg is the third-largest international financial centre in Europe but has a very small domestic market.

   
   

7. A focus on Asia: Hong Kong is the leading international financial hub in Asia ahead of Singapore, while China and Japan are the largest domestic markets in Asia. Hong Kong is a global leader in IPOs and other equity issuance by foreign companies. Despite efforts to boost its credentials as an international financial centre, Japan has dropped out of the top 10 in our international ranking.

   
   

8. Global growth in financial activity: in real terms, international financial activity worldwide has increased by 17% from 2015 to 2025. Domestic financial activity has on average increased by 18%. Growth in the US has been in line with global growth across the board, while the UK has seen more significant growth in international financial activity (+20%) than in its domestic markets (+3%).

   
   

9. The bigger picture: the success of a financial centre depends on its business environment, too, but methodologically it is difficult to incorporate qualitative metrics into score calculations and rankings. Our separate analysis of wider business environment metrics suggests that Switzerland and Luxembourg have the most attractive environments for the financial markets.

   
   

10. More detail? Our analysis is based on tens of thousands of data points. We invite market participants or policymakers who would like to see more detail on a particular financial centre to reach out to us.