ABSTRACT
A global financial centre is one that provided financial services to the world economy. This should not be confused with a position as the largest financial centre in the world, as that could be achieved by virtue of a location in the biggest economy, as measured by GNP. Such a location would provide a financial centre with a huge domestic base and a major role as the interface between that economy and the rest of the world, but would not make it necessarily a global financial centre. Instead, a global financial centre provided services used all over the world whether they related to the economy within which the centre was located or not. Inevitably, such services would be international in scope as a global financial centre’s competitive advantage lay in those areas where immediacy of contact was of least importance, as that was most easily provided on a local or national basis. Thus a global financial centre was best placed to handle financial flows between nations, provide credit for international trade, facilitate cross-border transactions, meet the needs of transnational businesses, and provide a mechanism for matching supply and demand world-wide through the provision of markets for capital, credit and currency. In turn, these activities dominated a global financial centre so that its orientation was external rather than internal as it responded to forces far distant from its physical location. Obviously, no financial centre located in a major economy was solely concerned with global activities, as much of its business was of a purely local or national nature. Nevertheless, a global financial centre was one whose primary activities were performed for the global market, whose operation was vital for that global market, and whose prosperity rested upon the performance of that global market. In turn, a global financial centre had to possess the communications technology, the organized markets, the business units and the trained and experienced personnel necessary to both maintain rapid channels of contact internally and externally and function successfully as a single co-ordinated entity in response to opportunities arising all over the world.2
