You're reading: Moscow drops to 65th place in world ranking of financial centers

MOSCOW - Moscow has fallen to 65th place from 61st in a ranking of global financial centers compiled by the Z/Yen Group.

Z/Yen Group profiled 77 financial centers, assessing them according to objective factors such as market access and infrastructure, and based on a survey of financial services professionals. The Global Financial Centres Index (GFCI) was first published in March 2007.

Moscow in 2011 dropped four rungs in the ranking to 65th place, while St. Petersburg slipped to 73rd from 71st.

The top spot in the GFCI was taken by London and New York was second, followed by Hong Kong and Singapore in third and fourth place, respectively.

Z/Yen Group’s assessment defined Moscow as a global center (there are also transnational and local ones). In the list of global centers, Moscow is at the last level, emerging, along with Luxembourg. The study states that Moscow and Luxembourg are considered global centers as a result of the activity seen in these cities. However, there financial services are not sufficiently broad and deep for them to be considered as leaders, the report said.

According to the GFCI survey of professionals, Moscow is among the ten centers likely to become more significant, but did not make it onto the list of the top ten centers where respondents’ organizations are most likely to open offices in the next few years.

The Russian government in 2008 approved a strategy to develop Russia’s financial market in the period through 2020, and a year later it approve a plan of action to create an international financial center in Russia. The Kremlin set up a council on development of financial markets, under which a taskforce was formed in 2010 for the creation of an international financial center. The taskforce is headed by former Kremlin chief of staff Alexander Voloshin.

The Audit Chamber in January, following an audit of the implementation of the strategy for development of the financial market, said that current growth rates would make it possible to achieve by 2020 only two of the strategy’s 12 targets: the ratio of market capitalization to GDP and the ratio of outstanding corporate bonds to GDP.

Voloshin said earlier that Russia would need to work on three main areas in order to create an international financial center: financial regulation and development of financial infrastructure, where global standard could be achieved in three to four years; development of city infrastructure, which would take eight to ten years; and improvement of the investment climate in the country. Achieving the latter could take a change of generations, Voloshin said.