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Latest GFCI Index shows Dublin slipping, with blame attributed to eurozone status Back
The Republic of Ireland's position as a member of the eurozone has resulted in another decline in Dublin's ranking in the latest GFCI Index published by Z Yen, the London consultancy, in its eleventh global ranking, in a series that goes back to 2007. The Global Financial Centres Index, which emphasises credit ratings rather than financial servicing attributes, showed a fall in Dublin's global financial ranking to 46, down 3 places, according to Finance Dublin, the Irish financial monthly.
Dublin slipped three places, from 43rd in the 77 centre ranking to 46th. Its best ever position was in 2008, when it rose to 8th in the global rankings, traditionally dominated in the survey by London, New York and Hong Kong. The also shows a pause in the relentless (in recent years) rise in the main Asian centres, and the continued breakthrough by Canada, now with four centres ranked in the index.

An indication of the severity of the euro issue for the IFSC is the fact that of seven British Isles centres, Dublin came in last, after, in order: London, Jersey, Guernsey, Edinburgh, Glasgow, and the Isle of Man.

The downgrade echoes concerns in recent months about the effect of the eurozone crisis on eurozone financial brands such as UCITS. By contrast, countries with high credit ratings in the eurozone have been less affected, including Frankfurt, Paris, and, of particular importance for Ireland, Luxembourg, a strong competitor in the funds space, said Finance Dublin.

The GFCI index tends to reflect the importance of the credit ratings of jurisdictions, a core issue for traditional banking centres, or IFCs, as distinct from financial services centres, where Dublin has strengths not emphasised in the scoring and ranking criteria used by Z Yen in the GFC Index, says Finance Dublin.

Said Z yen: "The recent crisis of the Euro has changed the balance of interest within the Eurozone. The capital cities of the weaker Euro economies are clearly suffering. Dublin, Milan, Madrid, Lisbon and Athens were all down in GFCI 10 and this decline has continued in GFCI 11 with these five centres all down in the rankings again. In contrast to the centres in the weaker Eurozone economies, Frankfurt and Paris have both risen in the ranks (by two places and three places respectively). This may be as a result of the political lead that Germany and France have been showing in attempting to come to terms with the Eurozone crisis."

"Historically, Frankfurt and Paris have moved up and down in the rankings together in all editions of the GFCI. There have been some other strong performances in Europe with Vienna (up 21 points), Amsterdam (up 12), and Warsaw (up 13)". It said that the Scandinavian centres of Stockholm and Oslo have done well, as also has Finland's capital Helsinki.

"Although Dublin in the survey slipped by 3 places, its overall rating rose by 7 points from the earlier survey - the problem is that other centres rose by more", said Finance Dublin.

The GFCI provides profiles, ratings and rankings for 77 financial centres, drawing on two separate sources of data – instrumental factors (external indices) and responses to an online survey of 1,700 financial services professionals. The GFCI was first published by the Z/Yen Group in March 2007 and has subsequently been updated every six months
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