vwd, 30 January 2002

Experts say London and Frankfurt can complement each other as financial centres

By Hans Hutter

 

Frankfurt (vwd) -- The relationship between the financial centres of London and Frankfurt is highly complex, and the picture of two rival "alpha males" does not do justice to it. This is the verdict reached by a bi-national research team from the Universities of Loughborough and Heidelberg, who at Finanzplatz e.V. in Frankfurt on Wednesday presented their study "Comparing London and Frankfurt as world cities: A relational study of contemporary urban change", with the recommendation: "With each other and not against each other".

The basis of the study is formed by a series of interviews held in parallel in Frankfurt and London in 2000 and 2001 by Michael Hoyler (Universität Heidelberg) and Kathryn Pain (Loughborough University) with "high-ranking decision-makers" and "leading institutions". They show that London and Frankfurt "are important nodes" in the world economy ("global cities"), place London alongside New York as "one of the two locations best networked globally" and rank Frankfurt as "the most important German 'global city'" in "the top position among Continental European cities".

The study comes to the conclusion that the "introduction of the euro was assigned only a minor influence by the companies interviewed on the positioning of both financial centres", with a rider that this only concerns the first two years of the European currency union. The euro and the European Central Bank definitely strengthened the image of Frankfurt as a city, but had very little practical relevance at present.The position of London as the world's leading financial centre was not threatened from current perspectives by the British inclination to hold onto the pound sterling.

The preeminent position of London as a financial centre is based in the view of this study very substantially on the available pool of knowledge and the density of institutions in the City. In contrast to information, which can be sent round the world in seconds, there is a strong association of knowledge, creativity, experience and qualifications with persons and organisations, anchoring these qualities much more strongly in a particular place. Such a concentration of knowledge and specialist networks cannot simply be transferred from one location to another; face-to-face contact remains very important in this field.

The research team came to the conclusion that the relationship between the financial centres of London and Frankfurt was often foreshortened into a competitive situation. The strengthening of one location need not take place at the expense of the other; this was not a zero-sum game. London and Frankfurt complemented each other in many respects, the study found. London's success as a centre of global networking was of benefit to Frankfurt, while the growing significance of Frankfurt as a "gateway" to the German and European markets in turn strengthened London.

 

 

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