Foreign investors’ interest in western European financial centres decreased over the past year. Data for the 12 months ending November 2015 showed that the largest hubs by financial services foreign direct investment (FDI) attracted a total of $2.62bn, almost one-quarter lower than the previous 12-month period, according to estimates by database fDi Intelligence.
More stable economic prospects for the region and increased clarity over certain banking rules may simplify investors’ decisions and attract higher long-term capital this year. However, the delay of other financial markets regulation because of the complexity of its implementation may hold back investment.
London remains the region’s leader, with $1.11bn – although this is substantially lower than previously recorded. China Construction Bank was the largest investor in the UK capital, thanks to a $167m new branch. Paris attracted a total of $245.6m to its financial centre and jumped to second place after not featuring at all in the previous top 10 table. Madrid slipped to third position with $238.9m, down from second.
Interestingly, Glasgow appeared in 10th place with $117.3m-worth of inward FDI. While it is not a city that would immediately come to mind when thinking about financial services, the Scottish centre attracted foreign funds to its banking, insurance and wealth management sectors.
London’s dominance is even stronger when it comes to outward investment. A total of $2.24bn was directed from the city to other financial centres, a figure not too distant from $2.34bn the previous year. Paris’s weight is heavier in this ranking too, with $1.37bn-worth of outward investment.
