Hong Kong’s financial hub gets a gold star for governance, red flag on readiness Hong Kong boasts the strongest institutional environment of any major financial hub but lags in growth and future readiness, according to a new index launched by New York University Abu Dhabi on Tuesday. The inaugural Financial Centres Competitiveness Index (FFCI), unveiled at Abu Dhabi Finance Week, ranked Hong Kong fourth overall, behind New York, London and Singapore. The index is built around two main criteria. On “footprint” – a measure that reflects the current scale and activity of financial centres – Hong Kong ranked third globally. But on “dynamics”, which tracks how these centres are evolving, the city slipped to 12th, according to Bruno Lanvin, president of NYU Abu Dhabi’s newly launched Descartes Institute for the Future, who led the FFCI research. Within the footprint category, Hong Kong leads the world on institutional environment, which covers political and fiscal governance as well as business support. Its resources – including capital and talent – were also rated among the best globally, placing second only to New York. “Hong Kong stands out for its strong financial foundations anchored in superior institutional performance … although the city could draw more on the potential of its university network to strengthen innovation, particularly in emerging technologies,” the report said. By contrast, Hong Kong scored poorly on several dynamics indicators, including gross domestic product performance, greenfield investment and the financial sector’s contribution to the broader economy, the FFCI data showed. For Hong Kong, the findings amount to a wake-up call, with Lanvin noting that highly dynamic centres such as New York, San Francisco and Singapore – the top three in this category – “changing so fast that a real challenge exists to the current hierarchy of financial centres around the world”. Hong Kong also trailed several Asian rivals on dynamics, including Shanghai, Tokyo, Beijing and Seoul. The city has in recent years taken steps to reinvent its financial centre, opening the door to new instruments such as cryptocurrency and stablecoins. The Hong Kong Monetary Authority implemented a stablecoin framework in August, designed to regulate issuers much like banks. But while the rules remain on the books, with the first batch of stablecoin licences issued early next year, Beijing’s subsequent clampdown on private stablecoin initiatives has chilled interest, raising questions over whether the scheme will ever operate at the scale once envisaged. https://www.scmp.com/business/banking-finance/article/3335762/hong-kongs-financial-hub-gets-gold-star-governance-red-flag-readiness (ICE HONG KONG)

Fonte notizia: South China Morning Post