The City of London’s Financial Services and Markets
1. The City of London’s financial Services and Markets:
The City of London is one of the world’s three leading financial centres, along with Tokyo and New York, and is by far the largest in Europe. While New York and Tokyo rely on very large domestic economies to fuel their business, London’s success can be attributed to its international business. Major financial institutions and markets in the City include the Bank of England, the London Stock Exchange, Lloyd’s insurance market, and the London International Financial Futures and Options Exchange.
1.1 Facts and figures of Britain’s financial services industry:
? There are more overseas banks in London than in any other city in the world:555 branches, subsidiaries and representative offices at the end of February 1999.
? Financial services account for almost 7 per cent of Britain’s Gross Domestic Product(GDP).
? Net overseas earnings of Britain’s financial sector reached a record ?25,200 millionin 1997.
? The London Stock Exchange is the largest market in the world for trading foreignequities, accounting for 63 per cent of global turnover.
? London is one of the world’s three major international bond centres. Some 70 per centof international bond trading in the Euromarket take place there.
? It has by far the biggest foreign exchange market in the world, handling about 32 percent of worldwide dealing, and with an average daily turnover, which is more than thatof New York, and Tokyo combined.
? It is one of the world’s largest international insurance markets, with a leading shareof aviation and marine insurance.
? It is the largest fund management centre.
? It is the world’s most important centre for advice on privatisation.
Supervision and regulation
2. Financial markets:
2.1 The Stock Exchange:
This is one of the world’s oldest marketplaces for the buying and selling of shares, but its advanced trading systems mean it is also one of the most modern. It is the world’s leading marketplace for international shares – more international companies choose to list in London than on any other exchange. It therefore plays a vital role in maintaining London’s position as a major financial centre.
The main market is where most British and international shares are listed, while the Alternative Investment Market (AIM), established in 1995, is for younger and fast-growing businesses.