City losing credit in global financial centre rankings

The Capital has dropped from 28th to 31st in the twice-yearly table of 75 world locations published by London-based think tank Z/Yen.

Its score fell from 615 out of 1000 to 600 in the Global Financial Centres Index.

Meanwhile, Glasgow bucked the trend of falling confidence in the global financial sector, climbing from 52nd to 46th place.

The ratings are based on an online survey of the views of financial industry professionals and a raft of other factors including availability of skilled personnel and property, rental costs, quality of life, operational costs, the tax system and the regulatory environment.

Kirk Murdoch, senior partner in Scottish law firm McGrigors, said Glasgow's rise in the rankings was "heartening news".

He added: "Edinburgh's performance may be cause for a little more concern given its apparent dip in popularity, but it needs to be viewed in the context of what seems to be a general decline in confidence among financial services professionals across the piece."

London and New York remain joint top of the league table, but with third-placed Hong Kong close behind and Singapore in fourth place.

The top four cities in the table controlled more than 70 per cent of equity trading, according to the index.

Edinburgh was badly hit by the near collapse of the Royal Bank of Scotland andHBOS.

Last month, there were warnings the city had not yet seen the full impact of the consequences of the banking crisis.

There have already been major redundancies among the banks here, but senior figures warned the drift of key decision-making from Edinburgh to London was continuing, leading to an exodus of top earners from the Capital.

That, in turn, would have a knock-on effect on the housing market and professions such as law, accounting and insurance.

Corporate lawyer Alastair Dickson, senior partner at Dickson Minto, was quoted at the time saying he feared for the future of Edinburgh as a city.

He said: "I don't want to knock it down, but I do think people underestimate how much the city has benefited from the growth of HBOS, RBS and Standard Life.

"With the demise of HBOS leading to it moving south, and the future of RBS uncertain, that will have a huge impact."