In today’s competitive world advanced and big emerging economics are seeking to establish international financial centre this is because.
1. Global financial services have vital economic significance in stimulating economic activity, employment creation and entrance of governments incomes through increased tax revenues solicited by financial transactions and economic growth.
2. Financial institutions serve to provide financial intermediation to all kinds of business activities. They may facilitate optimum allocation of financial resources.
3. Overall economy health is positively influenced by the strong financial services sector.
Currently, New York and London are the predominant financial centers in the world.
In Asian region, these are Tokyo, Hong Kong, Singapore and even Mumbai are seeking to play a leading role in catering to the regional needs and aspiring to become international financial hub.
Big and large, a financial hub may be defined as “a place in which there is a high concentration of banks and other financial institution, and in which a comprehensive set of financial markets are allowed to exist and develop, so that financial activities and transactions can be effectuated more efficiently than at any other locality (Jao, Y.C. 1997).
If country is seeking to develop an international financial hub it has to altreat the business of international financial activities.
4. Singapore vs. Hong Kong as IFH
Countries. It follows that on an average the US and the UK’s financial centres are dominant in the world. In Asia, Japan scores better. Compared to Singapore, Hong Kong score is also exceeding in acquiring the position of financial hub.
A leading international financial centre or hub should be able to provide intermediation for the international capital mobility. To capture the idea, the economy’s inward international investment position, exceeding FDI, shows its ability to alternate international financial activities.
5. Global Financial Crisis:
Global finance sector is highly fragile. History has recorded several financial crisis at global level, time to time.
In this section, some reflections and study notes have been presented to invoke further discussion on the issue of recent global financial crisis.