5 Caribbean islands and 5 Latin American cities appear among the world's leading financial centers
Ten financial centers in Latin America and the Caribbean appear in the most important ranking worldwide. While all those on the list have experienced increases in ratings over previous years, experts say that financial centers in the region still need to improve their reputation.
The Global Financial Centers Index (GFCI) is the main tool that points out how attractive financial centers are around the world, and allows us to understand their growth and competitiveness over time.
In issue number 22 of the GFCI, published in 2017, 108 centers were evaluated, based on information provided by institutions such as the World Bank, the Intelligence Unit of The Economist group, the OECD, and the United Nations. The measurements generated by these organizations are combined with the results of a virtual questionnaire to complement the evaluation and establish a ranking of the main financial centers worldwide.
The factors taken into account include evidence on the competitiveness of the telecommunications infrastructure, information on how favorable are the regulations for companies, government effectiveness indexes and indexes on the perception of corruption, among others.
In general, the first positions of the ranking do not show great variation. In the first place is London, followed by New York, and the third position is occupied by Hong Kong. Interestingly, despite the uncertainty and debates regarding Brexit, the London score had the lowest decrease among the top ten financial centers on the list with respect to the last evaluation.
Financial centers in Latin America
According to the report, the centers in the Latin America and the Caribbean region have shown positive developments. The Caribbean centers of the British Virgin Islands and the Bahamas had considerable increases in qualification, with increases of 38 and 32 points, respectively.
The report also highlights positive results in the centers of Sao Paulo and Rio de Janeiro. Although the Brazilian centers fell in the ranking, both had increases of more than ten points in the ratings.
On the other hand, Buenos Aires joined the list of the main global financial centers while Santiago de Chile remains as an associated center since it failed to accumulate a sufficient number of evaluations to enter the main index.
Despite the optimism regarding Latin America and the Caribbean, the report also contains statements from experts that put the situation in perspective. A manager of hedge funds based in London said that "the Caribbean centers still have a bad reputation to get rid of and in Latin America the centers are not much better." For his part, an investment banker based in New York said that "Latin America is still a very difficult place to do business."
It is not surprising that half of the centers in the region listed in the ranking are in places commonly considered tax havens. The European Union published in recent months a 'black list' in which they appeared, for example, Trinidad and Tobago and Panama. Other places that do not appear on the list, but have also been associated with this type of practices are the Cayman Islands and the Bahamas.
Although Panama was subsequently erased from the list of tax havens in the EU, along with other countries that undertook to improve their regulations, the decision has been widely criticized because of recent scandals that highlight the type of fraudulent practices They have made in the Central American country.
Despite financial development in Latin America and the Caribbean, it seems that there is still a long way to go to strengthen institutions and increase investor confidence. In addition to Santiago de Chile, Barbados is the only center in the region that appears on the list of associated centers. The rest of the Latin American financial centers are still far from appearing in the main GFCI list.
Latin American Post | Paula Bautista
Translated from " ¿Cuáles son los centros financieros más fuertes de Latinoamérica? "