CFIR Conference 19 March 2009

1. CFIR Conference 19 March 2009 Copenhagen’s Position: Global Financial Centres Index 5 Image Goes Here! Professor Michael Mainelli michael_mainelli@zyen.com

2. Global Financial Centres Index GFCI Background Headlines Copenhagen The Current Crisis Conclusions Z/Yen • City of London’s leading commercial think-tank • Key role in financial markets: • banking, trading, broking, insurance clients • global investment banking operations benchmarks • Numerous successful initiatives including: • Taskforce 2000 • Farsight Award • London Accord • Global Intellectual Property Index

3. What We Already Know Key areas of competitiveness: People Business Environment Market Access Infrastructure General Competitiveness

4. Why Study Financial Centres? • Financial centres add value by directing investment toward innovation and growth • Vibrant, competitive financial centres give cities economic advantages in information, knowledge and access to capital • Being part of the global financial network ensures that cities gain from global trade and growth • Policy creates successful financial centres

5. The GFCI Process 57 Instrumental Factors 26,629 assessments from 1,455 respondents

6. Sample Instrumental Factors People: Executive MBA Global Rankings, Financial Times European Human Capital Index, Lisbon Council Human Development Index, UNDP Quality of Living Survey, Mercer HR Happiness Scores, NationMaster Market Access: Capital Access Index, Milken Institute Securitisation Levels, IFSL Global Banking Service Centres, GaWC The International Finance Index, D Wojcik, Oxford University Infrastructure: Office Space Across The World, Cushman & Wakefield, Healey & Baker Competitive Alternatives Survey, KPMG Global Office Occupancy Costs, DTZ Offices With Air Conditioning, Gardiner & Theobald European Cities Monitor, Cushman & Wakefield, Healey & Baker Business Environment: Administrative and Economic Regulation, OECD Index of Economic Freedom, Heritage Foundation Total Tax Receipts (As a Percentage of GDP), OECD Ease of Doing Business Index, World Bank Opacity Index, Kurtzman Group Corruption Perceptions Index, Transparency International General Competitiveness: City Brands Index, Anholt Global Competitiveness Index, World Economic Forum Economic Freedom of the World Index, Fraser Institute

7. Top Ten GFCI Cities

8. Headline Findings Two global financial centres – London and New York – mutually supportive, and competitive A city has to be good in all areas to be a global centre – London and New York are 1st and 2nd in all five areas of competitiveness – the ‘Anna Karenina’ principle High degree of uncertainty but a ‘Flight to Safety’ Regulation now seen as more important than People Factors Respondent: “If you are in global financial services you need to be in London and you need to be in New York – you’re not a global player if you’re not in these two centres”.

9. Northern Europe Index

10. Copenhagen – Assessments by Location

11. Copenhagen’s Industry Sector Performance

12. Copenhagen – Key Strengths • World Competitiveness Scoreboard • Global Competitiveness Index • Business Environment • Index of Economic Freedom • Economic Freedom of the World • Ease of doing Business Index • Corruption Perception Index • Quality of Living

13. Sensitivity And Variance Unpredictable Stable

14. Instrumental Factor Performance Top 27 Factors: • Copenhagen v Amsterdam – higher in 21 and lower in 5 • Copenhagen v Stockholm - higher in 16 and lower in 6 (equal in three) • Copenhagen v Helsinki - higher in 19 and lower in 6 • Copenhagen v Oslo - higher in 20 factors and lower in 3 • Copenhagen v Hamburg - higher in 20 factors and lower in 2

15. Instrumental Factor Performance • Clearly more competitive than Helsinki, Oslo and Hamburg • Significant advantages over Amsterdam and Stockholm BUT • Lower in GFCI – another factor helping Amsterdam and Stockholm which is less powerful in Copenhagen?

16. Reputation • Reputational Advantage - higher average assessment than the GFCI rating • Perceptions about a centre (a measure of reputation) are higher than the quantitative measures alone • Out of 62 centres in GFCI 5 – Copenhagen is 61st in reputational advantage Respondent: “I am slightly surprised that Copenhagen is not higher up the GFCI rankings – it’s a great place to do business and I’d rate it higher than Amsterdam”.

17. Information Technology • GFCI measures financial centres • is interested in Finance and IT • E-readiness Score (EIU) - reliable index of ICT development, Denmark performs very strongly in this measure • The financial services industry has an increasing reliance on ICT. The strong standing of Denmark in this area indicates that there could be a strong potential for Copenhagen to increase its standing in financial services

18. Interesting Trends (IT) • The Cloud • Lowering low latency • De-MIP-ifying IT

19. Credit Crunch Effects? [Source: http://www.fortunewatch.com/handling-greed-and-fear-in-investing/]

20. GFCI 6 – September 2009 More factors More centres More detailed industry sector analysis Participate yourself - www.cityoflondon.gov.uk/GFCI

21. Thank You! Probably the Best Financial Centre in the World...