With finances, the U.S. has not done very well in the past number of years. New York was previously the world’s top financial sector. However, because of financial problems the World Economic Forum has determined that out of 55 countries that made the cut on the Financial Development Index, London is currently in first place.

The Index rates countries on the strength of their economic systems and markets. Countries are analyzed on more than 120 different criteria. These variables range from institutional and business environments to the magnitude of equity and bond markets, along with technology infrastructure, and the availability of getting personal and commercial loans.

Ever since 2008 Britain rose in the index from spot No.2 to No. 1. Britain has also faced bumpy markets but was able to stay afloat and claim first place because of the depth of its foreign exchange, derivatives, and insurance coverage. A second surprising jump was Australia. In just one year Australia was able to move up 9 numbers on the index in order to claim second place. New York sadly fell from the top position to third place.

London currently holds first place but experts question their ability to maintain their position. New York is still wealthier but the index is based on more than just assets. At present, individuals in Britain are criticizing the government officials for needless and increased regulations along with higher tax rates.

Other countries like France and Germany also fell down the list. They previously had been in the top ten but are now in rankings 11 and 12. As it turns out the biggest and most developed economies are the ones that have been struck the hardest by the international recession. Because of the extent, sort, and variety of these countries economies they have been exposed more than others by the downturn. Most urban nations fell sharply on the Index because of the credit catastrophe.

Still, the fall of these prosperous and influential countries let other developing countries like Brazil, Chile, and Malaysia onto the list. Because the large countries were hurt by the economy these other countries have been able to close in some of the gap between themselves and Western countries. Some of these countries were able to pull through the crisis reasonably unscathed because they learned from past crises or were not integrated enough into world financial systems.

In general the index showed how much the global economy has affected these countries. In this years top 10 there were significant declines in developed countries but growth in developing countries overall scores. The most amazing discovery of all was Australia’s banking system and the fact they moved up 9 steps on the Index.

Experts believed Australia would hold steady and improve a little bit but not jump from No. 11 in last years index to No. 2 in 2009. Even though countries are under pressure with their financial systems, Britain and the U.S. continue at the top because of the mass of capital, financial transparency, and other advantages that will keep them in the top for years.

However it’s important to understand that financial systems in the U.S. and U.K. are still in jeopardy. The fall in rankings on the index and the lead in relation to other countries drastic decline is concerning. What leadership decides to do in the near future is vital to the recovery and strength of not only individual countries but the global economic system.

About the Author
Diane Johnson earned a bachelor’s degree in Political Science from the University of Utah. She likes to write about the news, politics, degrees online, adult education, and the college experience.

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