Financial services location and competition among financial centres in Europe

Abstract

Competition among financial centres in the European time zone is often depicted, misleadingly, as a battle between London, Paris and, most recently, Frankfurt. This is misleading because it ignores the role of other locations and the nature of financial services operations. There are important national and regional centres in many countries, and also major specialist centres, such as Luxembourg, Edinburgh and Dublin along with the islands and small states such as the Channel Islands, Isle of Man, Liechtenstein, Malta and Monaco. These centres focus on particular activities such as offshore fund management, tax and financial planning, and the provision of a range of ancillary services complementary to other operations including group treasury, insurance and collective investments for the firms in the principal centres. As such, these centres are in direct competition not just with each other but with the international, national and regional locations.