Stern School of Business launches Financial Centers Competitiveness Index

ABU DHABI, December 9, 2017 – Stern School of Business at New York University Abu Dhabi, one of the world’s leading business schools, launched the “Financial Centers Competitiveness Index” on the sidelines of the Global Markets Summit during the Abu Dhabi Financial Week activities.

The index evaluates financial centers around the world, with New York, London and Singapore ranked among the top three.

Abu Dhabi and Dubai ranked 12th and 14th, respectively, while Riyadh and Doha ranked 26th and 29th, respectively, reflecting the growing influence of the Arabian Gulf region on a scene that has always been characterized by the dominance of well-established financial centers.

As the global economic landscape becomes increasingly complex, traditional indicators provide classifications without sufficient explanation of the drivers behind them. Here, the role of the Financial Centers Competitiveness Index is highlighted in addressing this gap, as it uses data science to combine data-based classifications with strategic analyses. It also provides policy makers with a clearer view of how financial centers compare and compete, helps emerging centers understand strategic planning methods in order to achieve growth, and supports decision makers in exploring the complex dynamics of the global economy.

The Institute for Global Financial Competitiveness develops research related to the changing global economic system, with a focus on the role of global financial centers.

By establishing a systematic benchmark for financial positions, it gives policymakers, business leaders and investors an evidence-based framework for dealing with changing global conditions.

Rob Solomon, dean of the Stern School of Business at New York University Abu Dhabi, said: “Global financial centers are among the most visible ways to monitor the transformations of the global economy, and through the Financial Centers Competitiveness Index and the Global Financial Competitiveness Institute, we want to go beyond classification tables and provide a research-based view of how cities can participate in building and strengthening financial capabilities.” The strong performance of cities in the Arabian Gulf region reflects how quickly new centers can grow when policies, regulations, talent and innovation efforts come together.

The Financial Centers Competitiveness Index uses a framework based on two main pillars that address the current situation and future aspirations. The Impact pillar tracks current activity and scope, including institutional strength, resources and local systems. While the Dynamics pillar assesses growth potential and future readiness, with a focus on technology and innovation.

The two pillars work together to highlight the status of current financial centers and their readiness to move into the future.

The online platform allows users to adjust burdens, test different possible scenarios, and create custom classifications that match their policy or investment priorities.

The preparation of the index is primarily supervised by Bruno Lanvin, President of the Descartes Institute and Senior Advisor at the Global Financial Competitiveness Institute at the Stern School of Business at New York University Abu Dhabi. and Anissa Shetty, associate field professor in the Department of Accounting at NYU Abu Dhabi’s Stern School of Business.

Lanvin said that financial centers need tools that enable them to operate on an annual basis instead of a quarterly basis, in light of changing growth engines, the development of new technologies, and the escalation of geopolitical risks. The goal of the Competitiveness Index for Financial Centers is to find a meeting point between data and strategy, as it helps cities determine their place within a multipolar global financial system.

The Financial Centers Competitiveness Index also highlights the growing importance of technology and infrastructure. As activities based on artificial intelligence and data expand, there is a need to enhance investments in digital infrastructure, cybersecurity and sustainable energy sources in financial centers, with the aim of establishing new models of financial intermediation.

For her part, Shetty said, the role of the Financial Centers Competitiveness Index is not limited to reading reality only, as it is designed to enable policy makers, financial center managers, and investors to test their hypotheses for making and implementing decisions, thanks to the framework based on the two pillars of impact and dynamics, and providing data through a comprehensive interactive platform. All parties experience varying degrees of uncertainty, so stakeholders can shift their focus to regulations, technology or efficiencies to realize their future aspirations more immediately. This flexibility is an essential factor in the ever-changing environment.

The Financial Centers Competitiveness Index is the first major work of the Global Financial Competitiveness Institute, which NYUAD Stern School of Business announced last month.

The institute is supervised by the world-famous investor Ray Dalio, and brings together an elite group of researchers and consultants.

The distinguished performance of the Gulf Cooperation Council countries reflects a broad regional trend of establishing several financial centers, and this comes as a result of advanced regulatory frameworks, investments directed towards encouraging innovation, and the expansion of financial activities in the region. These projects highlight the urgent need for tools such as the Financial Centers Competitiveness Index, which explains the development of financial centers and their competition over time.

The Institute intends to prepare the Competitiveness Index for Financial Centers on an annual basis and expand it through conferences, publications and research partnerships.

The Financial Centers Competitiveness Index was prepared by the Global Financial Competitiveness Institute at the Stern School of Business at New York University Abu Dhabi, with support from the Department of Economic Development – Abu Dhabi and the Dalio Charitable Foundation.

The index treats financial centers as pools of organized capital within an interconnected global economy, and is designed to be a practical and forward-looking tool for governments, financial center managers and market actors.

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