Zurich and Geneva dropped down the league of global financial centers, but the survey conducted by a London company looks to be based on a flaky set of credentials with very questionable results, according to Christian Bretscher of Zurich's banking lobby. 

By Christian Bretscher, head of the Zuercher Bankenverband, a lobby for Zurich-based banks

The two Swiss cities have both slipped down the «Global Financial Centers Index» compiled by the London-based think tank Z/Yen Partners. In the past six months, Zurich slipped 7 places to 16th and Geneva 10 places to 26th in the ratings.

London, New York and Hong Kong maintained their top three places in a ratings list where the top 10 spots were dominated by Asian and North American locations. Although Zurich remains the second-most attractive European financial center its decline raises questions on just what credentials the index ratings are based. The survey’s compilers fail to say how the ratings are measured. Are they based on reputation, relevance, future outlook, competitiveness or a combination of them all?

So Far, Clear as Mud

Apparently the index is based on «instrumental factors» and «assessments» with the former using undefined criteria and then calculated using a secret «instrumental factor prediction engine». So far, as clear as mud.

Somewhat more enlightening is the «assessments» criteria, based on some 2,340 replies from financial center participants to an online questionnaire Z/Yen’s website. But even here ratings disqualify those who have assessed less than 3 centers or more than half the total list, and who fail to identify their employers.

Equally puzzling is the choice of «assessors» and their assessment of themselves. Top dog is London with 1,321 points, Zurich gets 513 and Melbourne, which is 4 places higher than Zurich on the overall index, gets a mere 213 points.

Entertainment Value

It is thus clear just how thin the data base for the various detailed assessments of source, branch and size of institution are, and the reasons for the sharp moves in the rankings are still unclear.

We would be well advised to regard the index largely for its amusement value, but not to weight its results or short-term swings too heavily. It is best seen as a barometer for the mood in the global financial centers. We should focus rather on maintaining the competitiveness of Switzerland’s financial centers.

Christian Bretscher has since 2013 served as head of the Zuercher Bankenverbands, a Zurich-based banking lobby whose members are drawn from around 40 banks, employing some 50,000 people.