London was once ranked at the top of global financial centers, and although it is still contained among the top four in the world, which also includes the cities of New York, Hong Kong and Singapore, Britain’s capital city has now slipped into a lesser spot, coming in just behind New York, as statistics show in a survey done twice yearly by a consultancy group known as Z/Yen. This is the first time since the survey first began in 2007 that London has lost its prime position.
The statistics from the survey plainly indicate that the reputation of London is under an eagle eye watch, because of multiple scandals over handling of London interbank and foreign exchange rates due to its significant market share. Mis-sold payment protection insurance has also caused the banks to hit close to £20bn in payouts. Consultancy group chief executive Michael Mainelli believes that the steady drone of harm-inducing stories have posed a threat to the capital city. Regulatory activity by financial institutions, as well as banks, has quickly grown, leading some to believe that necessary entrepreneur business is being smothered by the increased compliance staff. Yeandle stated, “Because London is less of a swashbuckling place there’s less opportunity to make money.”
Another area pointed out was the tightening down on bonuses for bankers. A worker in a European bank based in London believes this rougher environment was a cause of people moving to centers in Asia and the United States, saying, “Some of my team has gone to the US … they’re continuing to restrict how much you can pay, whereas US banks don’t.” There are also a variety of other troubles that are still present for businesses in London, concerning procuring UK visas for non-European professionals, especially in light of the fact that the upcoming general election has moved immigration high on the agenda in the realm of politics.
Even amidst the many difficulties it is facing, London is still ahead of its rivals in Europe. As one London banker recounted a meeting held in Sweden with a previous coworker, “He was really missing the place… I still don’t think there’s anywhere else in Europe that comes close to matching it.” There were 3,246 people who participated in the survey, which took into account various factors including personal appraisals of how financial centers are changing in their competitiveness, availability of qualified staff, access to international markets, and infrastructure.