London is Top Finance Center

London remains first among world financial centers but fallout from the credit crisis has tightened its lead over rival cities, particularly in Asia and the Middle East, according to a survey conducted by the Global Financial Centres Index and reported by today's Financial Times.

New York remained in second place in the twice-yearly ranking conducted by the City of London Corp., while Singapore climbed past Hong Kong into third place, followed by Zurich, Geneva, and a resurgent Tokyo, which rose two places to seventh, the FT reported.

The survey found that both London and New York had lost ground since February in the wake of financial crises and huge job losses in financial services. The gap between New York and the third-place city is now the smallest it has ever been.

Stuart Fraser, head of policy for the City of London, told the FT that Singapore was benefiting from a perception that it was already tightly regulated and less likely to experience a strong regulatory crackdown. "London and New York are the two global cities and they are going to remain the global cities for a while yet but [other centers] will close the gap a bit," he said. "Singapore and Dubai are recruiting people. That makes them look positive."

The Global Financial Centres Index is commissioned by the City of London and calculated by the Z/Yen group based on surveys together with publicly available indices of financial activity, infrastructure and affordability. The latest index covers 59 cities.

The last surveys, conducted  in July, did not reflect the impact of the global credit crises that has intensified in the last month. Dubai, which came in 22nd on the main ranking, was ranked highest on a separate question about which cities were most likely to become significant in the future.