What is an International Finance Centre?

What is an IFC?

• A financial centre operating from a physical location
• Facilitating international activity
• Operating under a regulatory framework that meets international norms
• Providing financial services to international clients
• Providing support services such as law, accountancy and technology

Define the different sub-categories of IFCs

• London, Singapore, Hong Kong, New York, and (arguably) Dubai and Shanghai

• Guernsey (captive insurance), Bermuda (reinsurance), Jersey (channelling investments from the Middle East and Asia into the UK), Hong Kong (a gateway for business into and from China), Dubai (the Middle East), Mauritius (financial services gateway into India).

What are the general requirements for an IFC and what criteria does the Global Financial Centres index use?

• Be attractive to businesses not operating in the jurisdiction
• Meet a number of inter-related requirements, predominantly relating to stability and resources
• Benefit from political, economic, legal and regulatory stability
• Meet international regulatory norms
• Have good infrastructure: technology, modern offices, high quality communications, good international air links, good housing and local transport, access to talent (including an education system to produce the qualified people to fill lower and middle-level positions)

• Business environment
• Human capital
• Infrastructure
• Financial centre development
• Reputation

What is the recent trend in IFCs?

• The USA using its economic power as a diplomatic weapon
• China’s increasing power as an economic force and therefore as a user of financial services
• International tax and regulatory standards have been considerably strengthened
• Globalisation is increasingly being questioned
• Brexit will substantially change London’s role
• Technological developments reduce the importance of proximity.