Source : Business Times – 10 Oct 2009
It soars to fourth spot from last year’s tenth in WEF’s latest Financial Development Report
SINGAPORE has jumped to fourth place from 10th in a list of global financial centres ranked in this year’s Financial Development Report from the World Economic Forum.
The island’s rise came as the large industrialised countries fell out of favour following the financial meltdown.
Countries such as Germany and France lost heavily in terms of absolute scores – down 0.74 points and 0.68 points respectively – and crashed out of the top 10 list.
The US dropped from pole position in 2008 to third place this year. Last year’s runner-up, the UK, claimed top spot this year. And Australia took second place, leaping from 11th position in 2008.
‘While the UK came in first and the US came in third, both experienced a sharp drop in their overall scores that significantly decreased the margin by which they lead other countries in the index,’ the report said. ‘Financial instability weighed heavily on both, a factor that was offset by strength in some measures of financial intermediation.’
The report – by economist Nouriel Roubini and the head of emerging markets finance at World Economic Forum USA, James Bilodeau – ranked 55 of the world’s leading financial systems and capital markets.
The rankings were based on seven factors including institutional and business environment, financial stability and banking services.
Singapore and Hong Kong – which came in number five – were praised for consistent strength across their institutional and business environments, and scored highly for financial stability.
‘Within the banking pillar, both economies show room for improvement with respect to financial information disclosure. However, this is offset by the efficiency of their banks,’ the report noted.
‘Although they both exhibit healthy equity and foreign exchange markets, bond market development is an area for improvement in both economies, particularly Hong Kong.’
On financial stability alone, the US was ranked 38th, the UK 37th and Japan 34th. Norway came in tops, Switzerland was second and Singapore fifth.
Some developing countries performed well in the financial stability section of the index, Chile coming in third and Malaysia, Mexico and Brazil making the top 15.
‘Developing countries exhibited a relatively strong showing in the financial stability pillar of the index,’ Mr Roubini said.
‘For some, this is the result of learning from the mistakes of past financial crises, while for others it may reflect the relative lack of complexity and global integration of their financial systems.’
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