London’s influence as a major global financial centre is waning, warns a new report.
Only one in four bankers, asset managers and hedge funds see London as a major player in global finance in five years.
Many already believe the City has lost its crown to New York, while many are tipping Shanghai and Singapore as future contenders.
The research for the Kinetic Partners 2014 Global Regulatory Outlook found the number of executives picking London as the world’s leading financial centre slumped to 40% from 65% 12 months ago.
Half (49%) favoured New York instead of London, an increase from under a third (31%) a year ago.
Top dog
Meanwhile, 40% predict New York as global financial top dog in 2018.
Only 24% of the 132 chief executives questioned during the compiling of the report voted in favour of London, a drop from 41% last year.
Kinetic Partners spokesman Chris Lombardy explained that despite the volatility in global financial markets over the past five years, many still choose New York for their headquarters.
The study also revealed that many at the top of the financial services industry worldwide consider governments, regulators and institutions have failed to take on board the problems that trigged the global crash five years ago.
More than half (52%) feel more action is needed to prevent a repeat, while 41% believed the problems that triggered the downturn have not been fully addressed.
Damningly, 85% of financial executives feared regulators had little or no understanding of the banking meltdown that led to the credit crunch.
Clear theme
Many see the solution as better global regulation agreed between countries rather than each financial centre establishing different rules.
“This was a clear theme from the research,” said Lombardy. “The financial industry wants more regulatory co-ordination worldwide.
“Almost a third of chief executives in the sector want a single global regulatory network and see such a change as an important step forward for the financial services industry.”
According to the report, only 10% of executives spoke against more effective global financial regulation.
Another theme in this year’s report that has not emerged before is financial executives believe a ‘negative perception’ of the sector has led to governments acting to tighten up regulation to deal with perceived issues in the industry as a result of public pressure.
“It’s apparent that everyone still needs to work hard to develop a more co-ordinated global financial services sector in troubled times,” said Lombardy.