Globalisation and the creation of international financial centres

The rise of a limited number of ‘international financial super cities’ is a not an accidental but a necessary phenomenon in the modern globalised world economy. The two most striking examples of this development are London and New York – the world’s two largest international financial and business service centres.
Tokyo had the opportunity, in terms of the depths of its capital markets, to develop as an international financial centre to fully match New York or London. But it failed to do so due to mistakes in policy that will be examined in future posts. The result has been to create a space for an Asian financial centre to rival New York or London. The competition to settle which this will be is not yet resolved. The Chinese government is encouraging a number of its cities to develop projects to become such a centre. The objective possibilities of various Asian cities to become such a centre will be considered subsequently.
The similarities of New York and London illustrate that certain features of the development of an international financial centre are not accidental but intrinsic to their its nature. Their advantages compared to rivals will be considered.
A crucial feature is that while globalisation is rooted in the economy its effects cannot be confined to the economy. Any concept that countries will trade with each other more, and invest in each other’s countries more, but everything else will remain the same is entirely unrealistic and will decisively weaken the attempt to create a global financial centre. Globalisation has not only economic but major social, cultural and environmental consequences that an international financial centre must prepare for.
One of the key strengths of London compared to Paris in the last period for example was that Paris's attitude to international companies was 'your money is very welcome but please leave your culture behind you.' London, in addition to the much greater strength of its financial markets, adopted the approach 'your money is certainly very welcome and we assume you are going to bring your culture with you - which will help make our city more creative and dynamic.'
The cutting edge which London acquired in creative industries and culture, as well as its success in winning the Olympic Games, followed from that approach.