City of London - Economy

Economy

The City vies with New York City as the financial capital of the world; many banking and insurance institutions have their headquarters there. The London Stock Exchange (shares and bonds), Lloyd's of London (insurance) and the Bank of England are all based in the City. Over 500 banks have offices in the City, and the City is an established leader in trading in Eurobonds, foreign exchange, energy futures and global insurance. The Alternative Investment Market, a market for trades in equities of smaller firms, is a recent development. In 2009, the City of London accounted for 2.4% of UK GDP.

London is the world's greatest foreign exchange market, with much of the trade conducted in the City of London. Of the $3.98 trillion daily global turnover, as measured in 2009, trading in London accounted for around $1.85 trillion, or 36.7% of the total. The Pound Sterling, the currency of the United Kingdom, is globally the fourth most traded currency and the third most held reserve currency.

Since 1991 Canary Wharf, a few miles east of the City in Tower Hamlets, has become another centre for London's financial services industry which houses many banks and other institutions formerly located in the Square Mile. Although growth has continued in both locations, and there have been relocations in both directions, the Corporation has come to realise that its planning policies may have been causing financial firms to choose Canary Wharf as a location.