Financial centre
In 2007, the IMF produced the following definition of an OFC: a country or jurisdiction that provides financial services to nonresidents on a scale that is incommensurate with the size and the financing of its domestic economy.
[11] The FSF annual reports on global shadow banking use the IMF definition to track the OFCs with the largest financial centres relative to their domestic economies.
Because Sink OFCs are more closely associated with traditional tax havens, they tend to have more limited treaty networks and access to global higher–tax locations.
[27] One journalist suggested three factors for success as a financial city: "a pool of capital to lend or invest; a decent legal and taxation framework; and high-quality human resources".
[106] Tradable bonds as a commonly used type of security, were invented by the Italian city-states (such as Venice and Genoa) of the late medieval and early Renaissance periods while Florence can be said to be the birthplace of double-entry bookkeeping from the publication and proliferation of the work of Luca Pacioli.
In the sixteenth century, the overall economic supremacy of the Italian city-states gradually waned, and the centre of financial activities in Europe shifted to the Low Countries, first to Bruges, and later to Antwerp and Amsterdam which acted as Entrepôt cities.
[citation needed] By the early 1800s, London officially replaced Amsterdam as the world's leading financial centre.
An array of smaller international financial centres found market niches, such as Amsterdam, Brussels, Zurich, and Geneva.
[14]: 74–75 [19]: 12–15 Since then, New York and London have developed leading positions in different activities and some non-Western financial centres have grown in prominence, notably Tokyo, Hong Kong, Singapore and Shanghai.
[110][111][112] However, like New York, it faces new competitors including fast-rising eastern financial centres such as Hong Kong and Shanghai.
[14]: 1 [25]: 25 [26]: 4–5 Over the past few decades, with the rise of a multipolar world with new regional powers and global capitalism, numerous financial centres have challenged Wall Street, particularly London and several in Asia, which some analysts believe will be the focus of new worldwide growth.
[32] New York City remains the largest centre for trading in public equity and debt capital markets, driven in part by the size and financial development of the U.S.
GIFT city is now functional and has already won the crown of fastest emerging International Finance Centre of South Asia.
The private nationwide financial system in China was first developed by the Shanxi merchants, with the creation of so-called "draft banks".
Throughout the nineteenth century, the central Shanxi region became the de facto financial centres of Qing China.
With the fall of Qing Dynasty, the financial centres gradually shifted to Shanghai, mainly due to its geographical location at the estuary of the Yangtze River and to the control of customs in China.
