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Will London continue to be a global financial centre?

13/06/13

London has forged a reputation as one of the world's greatest centres for financial services over the last few decades, and despite the emergence of Singapore and Hong Kong as major rivals it continues to be a great draw for people who work in the industry.

However, the recent contremps over taxation, as well as the global economic slump, have seen the English capital's stock drop to some extent as businesses attempt to reduce their teams and their outgoings.

While London remains the undoubted centre for financial services in the UK, is its global reputation on the wane? Several industry experts, speaking to news provider Quartz, expressed the opinion that the sector is not as diminished as many fear.

The Centre for Economic and Business Research recently warned that financial jobs could be cut in the capital, with many executives now looking to Asia as an alternative - especially as the UK's future in the EU is so uncertain, and the eurozone continues to look weak.

But Charles Goodhart, director of a financial regulation research program at the London School of Economics, argued that the situation is more complicated than many experts have suggested.

He pointed out that EU regulatory changes could damage the City's standing in some ways, with the growth in power of the European Parliament lessening the influence of British financiers on international business.

Nevertheless, London's status as a centre of financial expertise, the fact that English is (ironically) the lingua franca of businesses across the globe, and its overlap between Western and Asian working days mean it is unlikely to lose its place completely.

"I think [London's] status as a global financial centre remains very strong. There are potential threats, but they are simply potential at the moment," concluded Mr Goodhart.

This follows a report from the Financial Times that placed London at the top of the global financial market, beating off challenges from New York, Hong Kong and Singapore.

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