Hong Kong top for financial development: WEF
Hong Kong has overtaken the United States and Britain to rank top in a World Economic Forum survey on countries' financial health published on Tuesday.
Strong scores in non-banking financial services such as initial public offering (IPO) activity and insurance helped lift Hong Kong to rank number one on the annual Financial Development Report -- the first Asian financial centre to lead the list, the WEF said.
The US fell to second place amid continuing concern over its financial stability but its score remained almost unchanged from 2010 thanks to its strong foreign exchange and derivatives markets.
Britain meanwhile dropped from second to third place, with the WEF citing lower scores on securitization and stock market launch activity.
Singapore and Australia took fourth and fifth places respectively in the report, which ranks countries based on factors including their business environment, financial stability and the size of their capital markets.
"Hong Kong's ascent to the top of our index marks a major milestone, the first time in the report's history that the United Kingdom or the US didn't come out on top," said Kevin Steinberg, chief operating officer for the World Economic Forum USA.
"While Western financial centres are understandably focused on short-term challenges, this report should serve as a wake-up call that their long-term leadership may be in jeopardy."
More than 90 percent of countries have not returned to pre-financial crisis levels in terms of access to capital, according to the report, which compared availability of credit and loans, venture capital and financing through local equity markets from 2008 through to 2011.
Although year-on-year changes showed some improvement, the gaps in many cases are "quite substantial", the WEF said.
"The need to make different forms of capital available will be essential for future growth and recovery," said Isabella Reuttner, editor of the report.
"The challenge will be how to encourge economic activity while not fuelling the next credit bubble, which could cause severe consequences down the line."
Completing the top ten in the survey was Canada at number six, followed by the Netherlands, Japan, Switzerland and Norway.
The report defines financial development as "the factors, policies and institutions that lead to effective financial intermediation and markets as well as a deep and broad access to capital and financial services."
© 2011 AFP