Scots cities slide down money table

Published on Tuesday 22 September 2009 22:09

SCOTLAND'S status as a global finance centre has tumbled in the wake of the credit crunch, a new report reveals.

Both Glasgow and Edinburgh have dropped significantly down the Global Financial Centres Index, which rates cities on their attractiveness and competitiveness within the finance sector.

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Glasgow has plummeted 18 places to number 49 in a table of 75 cities around the world, while Edinburgh dropped seven places to number 27. Asian cities including Shenzhen, Shanghai and Beijing rose rapidly in the wake of the credit crunch.

Business groups defended Scotland's financial sector, claiming that the situation had already improved since the figures were compiled earlier this year.

However, the rankings now put Glasgow behind the Bahamas, Milan and Vienna, while Edinburgh, which had previously been in the same category as Paris and Washington DC, now lags behind the Cayman Islands, the Isle of Man, Taipei and Dublin.

A spokeswoman for Scottish Financial Enterprise said that while they were not complacent about the findings, the report lagged behind the current situation by six months and was compiled prior to key announcements such as Tesco Personal Finance opening in Glasgow.

"We firmly believe that the skills and diversity Scotland has will be our strength in the long term," she said. "And we will look to the long term, while doing all we can to promote the industry."

Despite the buffeting of the financial meltdown, London managed to hold on to the top position in the index.

The table, sponsored by the City of London, is based on assessment of people and skills, business environment, property factors with other infrastructure, market access and general competitiveness.

In addition, there is an online questionnaire giving 1,800 finance professionals' assessments of finance centres.

A spokesman for CBI Scotland said that they were not surprised by the index, but insisted that this was not a permanent state of affairs.

"Glasgow and Edinburgh haven't lost the excellent skills base and experience that they have in the finance sector," he said.

"And looking at Glasgow in particular, it is becoming a hub for the new banking forms with the Tesco Personal Finance centre, although Edinburgh is also showing the way forward."

Director of Scottish Enterprise's Financial Services Jim Watson said of the figures: "Today's news that Glasgow has dropped down the Global Financial Centres Index comes as a surprise, as whilst Glasgow has not been immune to the economic pressures affecting financial centres worldwide, it has remained robust and in recent months has seen the creation of almost 1,400 new jobs from Tesco Personal Finance and Esure."

Mr Watson said that he thought the index had been skewed by a large increase in the number of people from Asia taking part in the survey.