In this article, we take a look at the top 20 financial cities in the world.
Financial cities are financial centers that help facilitate commerce and promote growth. The leading financial cities have a deep capital market that can help companies access capital.
The financial city of San Francisco, for example, is pretty close to the world’s innovation capital, Silicon Valley. Given its proximity, some banks such as Wells Fargo & Company (NYSE:WFC), which has its headquarters in San Francisco, help companies in Silicon Valley attain capital to hire more employees or to spend on new projects.
New York City is another leading financial center. Given New York City has the world’s two biggest stock exchanges, the New York Stock Exchange and the NASDAQ, many financial firms have their regional or national headquarters there. With so many financial firms with operations in New York City, the city facilitates a lot of capital investment that helps the United States economy and the global economy grow.
With smart investments, the right projects are financed and more goods and services are produced than if the capital weren’t allocated as well. If more goods and services are produced, economies expand and living standards improve.
Financial cities themselves benefit from having substantial financial firms and leading companies with regional or national headquarters based in their areas. Many leading financial cities have high real estate prices and higher incomes per capita than in other parts of their respective countries.
Financial City Growth
In terms of growth, many financial cities grow organically. Many big companies want to have their headquarters in cities where those companies can potentially access capital easier to grow. Financial companies that facilitate access to the capital markets also want to have operations close to many big companies to help increase sales more easily.
If one city already has a number of big companies and financial companies located there, many big companies may want to have their regional or even national headquarters in the city. As a result, the city becomes even bigger, has even more big companies, and even more financial firms.
Countries with the Most Financial Cities
Given the United States has the largest economy in the world and the U.S. dollar is the dominant global reserve currency, the United States has the most leading financial cities in the world, including the leading financial center in the world in New York City.
Considering China’s economy is the second largest in the world, China also has a number of leading financial cities.
Several leading European cities are also leading financial centers given they are the capitals of big economies in Europe. For those of you interested, check out Countries by GDP: 30 Largest Economies in the World.
Methodology
For our list of Top 20 Financial Cities in the World, we used the rankings from 32nd edition of the Global Financial Centres Index (GFCI 32) which uses a variety of quantitative measures in addition to online questionnaires.
Top 20 Financial Cities in the World
20. Geneva
GFCI Rating: 709
Geneva is the second largest city by population in Switzerland, which is one of the wealthiest countries in the world by GDP per capita. As a financial city, companies with operations in Geneva, which include 87 banks, collectively have 37,900 financial and related professional employees.
19. Amsterdam
GFCI Rating: 710
Amsterdam is a leading financial city in Europe in addition to being a leading tech hub on the continent too. As a city, Amsterdam benefits from having an educated and talented workforce many of whom are fluent in English. Amsterdam is also the largest city in the Netherlands, which has a GDP of $1.013 trillion in 2021.
18. Frankfurt
GFCI Rating: 711
Frankfurt is a financial center in Europe’s largest economy of Germany. Given it is a financial center, the city has over 200 financial institutions including many foreign banks. Frankfurt ranks #18 on our list of Top 20 Financial Cities in the World.
17. Dubai
GFCI Rating: 712
Dubai is one of the richest cities in the Middle East that also has a number of financial firms with operations based there. In terms of its GFCI rating, Dubai scores a 712, up 21 from the past edition of the index, GFCI 31.
16. Tokyo
GFCI Rating: 713
Tokyo is the capital and the largest city of the world’s third largest economy of Japan. Considering Tokyo is huge in terms of population, the city has many leading companies and leading financial firms based there. Tokyo is also the home to Tokyo Stock Exchange which is one of the largest stock exchanges by aggregate market capitalization of listed companies. Given its strengths, Tokyo ranks #16 on our list of Top 20 Financial Cities in the World.
15. Washington D.C.
GFCI Rating: 714
Although it isn’t the financial capital of the United States, many key decision makers that can affect economic growth such as the President of the United States and the Federal Reserve Chairman reside the nation’s capital. As a result, many leading companies including financial companies have their headquarters or operations in Washington D.C. and the city is a leading financial city as a result.
14. Boston
GFCI Rating: 715
Boston is a leading financial hub because many financial firms have operations there. One reason for many financial firms having operations in Boston is that the city is home to the leading universities of Harvard and MIT whose graduates many financial firms want to recruit.
13. Sydney
GFCI Rating: 716
Sydney is the most populous city in one of the largest economies in the Asian Pacific, Australia. In 2021, Australia had a GDP of $1.553 trillion, making it a sizable market for many multinationals that want to grow in the region. Considering Sydney’s status as the country’s biggest city, many companies, including financial companies, have established regional headquarters there.
12. Chicago
GFCI Rating: 717
Chicago is a leading financial center given it is home to the Chicago Mercantile Exchange or CME which is a leading futures exchange for interest rates, stock indexes, foreign currencies, and commodities. As a result of the Chicago Mercantile Exchange based there, many futures orientated firms and investment firms are also based there.
11. Seoul
GFCI Rating: 718
Seoul is the capital of South Korea which has one of the biggest economies in Asia. In 2021, South Korea had a GDP of $1.811 trillion, ranking #10 in the world in terms of nominal GDP for the year. In terms of its GFCI Rating, Seoul ranks #11 on our list of Top 20 Financial Cities in the World.
10. Paris
GFCI Rating: 719
Paris is the capital of one of the world’s biggest economies in France. In 2021, France had a GDP of $2.958 trillion ranking #7 in the world. As a result, many leading French companies, including many financial firms, have their headquarters in Paris which ranks #10 on our list of Top 20 Financial Cities in the World.
9. Shenzhen
GFCI Rating: 720
Shenzhen is China’s version of Silicon Valley with numerous startups and big Chinese tech companies with operations there. Shenzhen has a leading stock exchange, Shenzhen Stock Exchange, based in Shenzhen as well. Given many big companies with operations there, many financial firms are based in the city. Considering its GFCI Rating of 720, Shenzhen ranks #9 on our list of Top 20 Financial Cities in the World.
8. Beijing
GFCI Rating: 721
Like Washington D.C. is for the United States, many of China’s key decision makers that help decide economic policies such as the President of China reside in Beijing. As a result, many big companies want to have their headquarters in the city. As the capital of China, many large state owned companies including the big four Chinese banks all have their headquarters in Beijing.
7. Los Angeles
GFCI Rating: 722
Not only is it the home to Hollywood, but also Los Angeles is a leading financial city. In terms of GDP, the Los Angeles Long Beach Anaheim metropolitan area is the second largest in the United States, trailing only the New York Newark Jersey City metropolitan area. Given the substantial economy, many leading corporations, including numerous financial firms, have their regional or even national headquarters in Los Angeles.
6. Shanghai
GFCI Rating: 723
Shanghai is the home to the Shanghai Stock Exchange which is China’s largest stock exchange by aggregate market capitalization of listed firms. The city is also a leading port and one of the largest cities in China by GDP. Considering its GFCI rating of 723, Shanghai ranks #6 on our list of Top 20 Financial Cities in the World.
5. San Francisco
GFCI Rating: 724
San Francisco is located right next to Silicon Valley which is where many leading tech giants have their headquarters. Considering its status as a financial city, San Francisco has helped Silicon Valley grow over the years via providing investments, banking services, and much more. As Silicon Valley has grown, San Francisco has become arguably more of a financial city given many companies want to do business with the leading tech giants have expanded there. According to the thirty-second edition of the Global Financial Centres Index (GFCI 32), San Francisco also ranks #2 in the world in terms of fintech, trailing only New York City.
4. Hong Kong
GFCI Rating: 725
Hong Kong is one of the most international cities in Greater China given its history as part of Britain in the last century. Many foreign financial institutions have operations in the city and Hong Kong also has one of the world’s largest stock exchanges by aggregate market capitalization of listed companies in terms of the Hong Kong Stock Exchange.
As a financial city, the government of Hong Kong writes, “As one of the leading international financial centres, Hong Kong is a prime location for financial services and home to many financial institutions. Hong Kong’s financial markets operate under effective and transparent regulations that are in line with international standards. Located at the heart of Asia, Hong Kong also thrives on close financial integration with Mainland China, extensive networks with the rest of the world, sound legal system, simple and competitive tax regime, free flow of capital, a full range of financial products, and a large pool of financial talents. The financial sector had a workforce of over 277,000, or 7.6% of working population in Hong Kong in 2021, and contributed to some 21.3% of Hong Kong’s Gross Domestic Product.”
3. Singapore
GFCI Rating: 726
Singapore ranks #3 on our list of Top 20 Financial Cities in the World given its GFCI rating of 726, up 3 places from the previous GFCI ranking. Although it is a city state, Singapore has a sizable economy with a GDP of $397 billion in 2021. Singapore also has numerous multinationals that have their Southeast Asian headquarters based there.
2. London
GFCI Rating: 731
London is the world’s second largest financial city given many financial firms such as banks, insurance companies, and fintech companies have their headquarters there. The city is responsible for $3.8 trillion in daily forex, more than New York City, Singapore and Hong Kong combined. London is also the headquarters of many investment managers that manage more capital than any other financial city in Europe.
1. New York City
GFCI Rating: 760
New York City ranks #1 on our list of Top 20 Financial Cities in the World given its GFCI rating of 760. New York City is the home to Wall Street and has the deepest capital pool of any city. According to NYC.gov, New York City is also home to 45 Fortune 500 companies and the city has a large talent base of over 330,000 financial service workers. Furthermore, New York City has the world’s two top stock exchanges in terms of aggregate market capitalization of listed companies in the New York Stock Exchange and the NASDAQ.
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Disclosure: None. Top 20 Financial Cities in the World is originally published on Insider Monkey.
