With its convenient time zone, usage of English, and light restrictions, London is the world's financial center. The United Kingdom is the most significant net exporter of financial services. Several cities, notably Venice and Amsterdam, have held and then relinquished the title over time. How can London maintain its role as a global financial center after Brexit and the likely loss of passporting privileges for British businesses? How did it get there? We briefly go through the preceding events.

City of London

The City of London was founded in AD 50 on the north bank of the Thames and had its mayor and administrative body, the City of London Corporation. It is known as "The City of London."

Like in other ports, the business thrived in the City, attracting traders and entrepreneurs worldwide. By the end of the 18th century, London's population had grown from 50,000-60,000 to a million people, according to historian Peter Borsay. According to Tony Wrigley, a historical demographer, between 1650 and 1750, it received an average of 8,000 immigrants every year.

Competition in the Global Market

From Amsterdam, the commercial and financial hub of the 17th century, London borrowed and built upon financial technologies. Market-based financial institutions were more prominent in the Dutch metropolis in the 18th century as the country's economy and governmental power declined.

Until the mid-19th century, London and Paris battled to be the world's financial capital. In 1848, after France's defeat in the war with Prussia, the Bank of France halted specie payments to the City of Paris. "The Bank of France's utility as a storehouse of cash has ended with the cessation of coin payments." You can't write a check on it and know that you'll get gold or silver in return!

Brexit And The Big Bang

Controls on foreign exchange imposed during World War II were lifted in October 1979 by the British government. New York Times quotes the head of the London Stock Exchange, Nicholas Goodison, as saying that "a lot of harm" was done to the City's reputation for being a "leading financial hub." When the financial markets of New York City were deregulated seven years later, it was called the "Big Bang." As a result of the elimination of fixed commissions, the admission of international corporations, and the changeover to computerized trading, London became the world's financial center.

How Do Cities Become Financial Hubs?

There are several definitions of the term "financial center," however, the most commonly used terms are "financial hub" and "financial center," which relate to the same thing. A stable political system underpins a robust and transparent legal and regulatory framework at these centers, as well as excellent infrastructure, communications, and commercial plans. Because of their superb level of life, these cities are attractive to professionals looking for a place to work and grow.

The World's Most Powerful Financial Hubs

Singapore

Singapore's business-friendliness stems from the country's well-defined legislative structure, a welcome addition to the city-already state's solid political and economic foundation. As one of the Four Asian Tigers and a significant financial hub, the little island in the Southeast Asian area has made a name for itself.

London

Trade and business have been thriving in London since the Middle Ages. The City is one of the world's most popular tourist destinations and a popular location for business. Foreign currency, bond trading, banking, and insurance services are well-known in London.

Zurich

Switzerland's largest city, Zurich, is a world-renowned financial hub. Many financial organizations and banks have made the City a center for asset management and insurance firms. Because of its low tax burden, Zurich is a popular choice for investors and businesses worldwide.

New York City

According to the Global Financial Centres Index, New York is the world's most important financial center, a title it has held for several years. The New York Stock Exchange (NYSE) is the world's largest stock exchange by market capitalization, and Wall Street is a prominent part of the City.

Hong Kong

Hong Kong is one of the world's most important financial centers, with many banks. As a former British colony, Trinidad and Tobago has a robust legal system for inhabitants and businesses. As a result of its advantageous position, Hong Kong has prospered. In the last century, the City has served as a bridge connecting China and the rest of the globe. That's why China's the second biggest trading partner in Hong Kong.

Chicago

In 1848, the Chicago Board of Trade introduced commodities futures trading, which gave the City's derivative market its notoriety. The National Stock Exchange of India is the world's second-largest futures exchange by volume. All U.S. option contracts are cleared by the Options Clearing Corporation in Chicago. Many of Illinois' 30 Fortune 500 firms are based in Chicago, and over 400 big corporations call the city home.