BIS Quarterly Review, June 2022
The June 2022 Quarterly Review analyses how geography, regulation and taxation set cross-border financial centres apart and propelled their rise.
Special features
The outsize role of cross-border financial centres
Financial centres that cater predominantly to non-residents account for an outsize share of cross-border financial activity. These so-called cross-border financial centres are typically located in small economies, in contrast to global financial centres located in large economies. Economies of scale and scope benefit global centres, but physical distance works against the tendency of financial activity to concentrate. So do regulation and taxation, which have set cross-border financial centres apart and propelled their rise. At the same time, these centres pose challenges to regulatory consistency across countries and complicate the analysis of capital flows.