IN THE DEFENSE OF "THE CITY"

1. The financial services industry (“the City”) is one of the few areas where the UK is a world leader and it is a huge earner. Unlike trade in goods, the UK runs  a very large surplus on trade in financial services, including with the EU. The financial services industry accounts for about 4pc of GDP, about half of which probably represents business done with the EU, or about 2pc of GDP.
2. London has enormous advantages as a financial centre. Paris and Frankfurt simply aren’t in the same league.They don’t have the scale of support services and a critical mass of expertise  involving lawyers, accountants, administration and back-up staff not to mention the depth of the labour market in financial services that London enjoys. Indeed, the City possesses intrinsic advantages, including the UK’s legal system, the English language, a convenient timezone, a large pool of skilled labour.
3. The City’s competitive advantage is founded on more than just unfettered access to the single market. British exports of financial services to the EU were worth £19.4bn in 2013, against imports of just £3.3bn. More than 40% of the City’s business is with the rest of Europe.
4. Looking at the components of the City as a financial centre today, the single-most important foreign group consists of US-domiciled financial institutions, banks, institutional investors and fund managers, and ratings agents.
5. The City provides the critical mass and infrastructure for transactions as a global financial centre and as an alternative to US or Asian centres.
6. The country’s total banking assets are more than five times greater than its GDP, which is more than the double that of the EU average.
7. Of the 250 foreign banks operating in the UK, 80 are European banks including those outside the EU such as Swiss or Norwegian banks. They own 16% of UK banking assets. Many European banks (Italian, French, German) have domiciled most of their wholesale activities (i.e. lending and borrowing) in London, prompted by lighter regulations and a friendly tax system.

According to the latest rankings, known as the Global Financial Centres Index (GFCI), that covers 98 business districts around the world, based on an array of factors such as each city’s business environment, infrastructure, and the quality of its human capital and financial sector development. London comes top in every category.

The rankings emphasise London’s leading position in Europe as a global financial centre. The only other European city to make the top 10 is Zurich, in seventh place. The highest-ranking EU city, London aside, is Frankfurt, in 14th place. Overall, Asia and America dominate the upper echelons of the table.

1. London: 1st in the world
2. Zurich: 7th in the world
3. Geneva: 13th in the world
4. Frankfurt: 14th in the world
5. Luxembourg: 19th in the world