Financial Centres of the Future

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Financial Centres of the Future

• Kevin Davis
• Commonwealth Bank Chair of Finance
• Director, Melbourne Centre for Financial Studies

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The Growth of Financial Engineering
Its time we face reality my friends, were not
really rocket scientists
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New Financial Markets An example
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Key Criteria in Financial Firm Location Choices

• Results from a 1996 survey
• Human resources
• Diversity Size of Markets
• Diversity of Financial Products
• Presence of International Banks
• Volume of Transactions
• Market Regulation
• Infrastructure
• Operation Costs
• Source K Bindemann The Future of European
  Financial Centres

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Sizing Up the City

• 2003 Study for City of London
• Key attributes of financial centre success
• A pool of skilled labour
• A competent regulator
• A favourable tax regime
• A government responsive to financial sector
  concerns
• A light regulatory touch
• An attractive living environment

Tax and regulation
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Sizing Up the City Take 2
Source The Competitive Position of London as a
Global Financial Centre 2005
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(No Transcript)
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Views on Asian Financial Centres

• The City of London survey states
• Current top three Singapore, Hong Kong, and
  Tokyo.
• Respondents expect Shanghai Beijing to replace
  Singapore and Tokyo in importance within the next
  few years.
• Due to sheer volume of capital flows
• Availability of skilled labour?
• Tokyo is seen as unlikely to be become more
  important because of poor regulation, and too
  much bureaucracy.

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Factors relevant to location for core asset
management activities
Source Oxera, 2005
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Factors relevant to location for back office
activities
Source Oxera, 2005
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Factors relevant to location for marketing
distribution
Source Oxera, 2005
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• Whoever said money cant buy happiness simply
  didnt know where to go shopping

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• Whoever said money cant buy happiness simply
  didnt know where to go shopping

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Thank You