Mexican and Brazilian cities fair well in latest global financial center ranking

Mexico City, São Paulo and Rio de Janiero have all moved up the rankings in the Global Financial Centres Index, a financial markets competitiveness report released by British research consultancy Z/Yen Partners.

The index, which has been developed in conjunction with the China Development Institute since 2016, is updated every September and March. Z/Yen Partners’ Global Financial Centres Index (GFCI) evaluates the competitiveness of 100 financial centres across the globe, from London, New York and Hong Kong through to Panama, Buenos Aires and Trinidad & Tobago – using 137 quantitative measures compiled from leading data sources and over 30,000 financial centre survey assessments.

In respect to the metrics used, which draw from sources such as the World Bank, the OECD, and the UN, the instrumental factors are broken down into the five broader categories of business environment, human capital, infrastructure, financial sector development, and reputation, with further inputs drawn from a range of global consulting firms including A.T. Kearney, Capgemini, Mercer, The Boston Consulting Group, and Big Four accountancy and consultancy firms PwC and KPMG.

The ranking was topped by New York, which overtook London after the UK capital struggled through negotiations with Brussels. The next four places were dominated by Asian financial centers Hong Kong, Sinapore, Shanghai and Tokyo, indicating that the Asian century is well underway. Sydney, Beijing and Zurich made up the rest of the top 10.

All offshore financial centers in the Caribbean fell overall in the latest rankings bar one – Bermuda – which moved up 6 spots to 30th position. Just above Bermuda in 29th position is the Cayman Islands, which faired poorly with 17 points wiped off its rating. The next appearance from a financial center in the region is Brazil’s São Paulo at number 55. 

São Paulo outperformed the rest of Latin America and almost every other financial center mentioned in terms of improvement. The Brazilian financial capital is the centerpiece of the world’s 9th largest economy and moved up 12 spots in the six months since the 23rd GFCI. During that time São Paulo gained a rating of 616, a change in rating of 44, with the city only eclipsed by improvements in Tallinn, Estonia, Astana, Kazakstan, Doha, Qatar and Reykjavik.

Aside from São Paulo and Bermuda, the only other centers that rose in the index were Mexico City and Rio de Janeiro, leading the authors of the report to comment that there were “mixed results” throughout the region. The Mexican federal district gained 29 points to move up 8 spots on the index to 62nd. Rio de Janeiro also dramatically improved alongside its Brazilian sister city with an overall ranking of 65th, up from 81st earlier this year.  

Panama and the British Virgin Islands both gained in their score and yet fell on the index due to the strong performance of newcomers in Asia, Eastern Europe and the Middle East. The bottom 10% of the index featured Buenos Aires and Trinidad & Tobago which both dropped in their positions and their score, 18 and 13 spots respectively. Trinidad & Tobago experienced one of the most dramatic falls – with the country experiencing a downturn in oil production. 

The report’s authors note that in the past decade and a half – since the beginning of the GFCI –there has been a significant shift away from Western financial centers. “Financial centres can, and do, control large amounts of their destiny. GFCI 24 shows the wide range of strategy, competition, specialisation, and, may I say, style in which they do it,” Z/Yen’ CEO Michael Mainelli said in conclusion.