(Updates with Hong Kong financial services secretary’s comments in sixth paragraph.)
Dec. 14 (Bloomberg) -- Hong Kong topped the World Economic Forum’s 2011 index of financial market development, supplanting the U.S. and U.K. from the highest rankings for the first time.
The U.S. and U.K. each dropped one place from last year to rank second and third respectively in the forum’s fourth annual Financial Development Report published yesterday. Hong Kong jumped from fourth, making it the first Asian financial center to lead the 60-country index, helped by non-banking services such as initial public offerings and insurance, it said.
Fallout from the 2008 global financial crisis continues to hamper companies’ ability to access capital, weighing on economic growth, the WEF said. About 90 percent of the countries surveyed have yet to return to levels before the crisis in terms of access to capital, it said, and financing through local equity markets remains challenging.
“While Western financial centers are understandably focused on short-term challenges, this report should serve as a wake-up call that their long-term leadership may be in jeopardy,” Kevin Steinberg, chief operating officer of the forum in the U.S., said in the statement.
Worldwide, IPOs have plunged 35 percent this year to $175 billion compared with the same period of 2010, according to data compiled by Bloomberg. IPOs more than doubled to $285 billion last year, the data show.
“We are working very hard to maintain Hong Kong’s competitive advantages and increase Hong Kong’s capital markets,” K. C. Chan, the city’s secretary for financial services and the Treasury, said today. “In the future years, developing Hong Kong’s renminbi business will give our financial center an additional boost.”
London kept its rank as the world’s top financial center in a September study that used statistical data and a poll of finance professionals. The Global Financial Centers Index, created by consulting firm Z/Yen for the City of London, found that the U.K. capital beat New York and Hong Kong on issues such as regulation, tax and lifestyle.
In this year’s World Economic Forum ranking, Singapore slipped one place to fourth. Australia, Canada, the Netherlands, Japan, Switzerland and Norway rounded out the top 10.
The report defines “financial development” as “the factors, policies and institutions that lead to effective financial intermediation and markets, as well as deep and broad access to capital and financial services.”
Following is a table of the first 10 countries ranked in the World Economic Forum Financial Development Index.
--With assistance from Nathaniel Espino and Sophie Leung in Hong Kong. Editors: James Gunsalus, Russell Ward
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