International financial centre
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An international financial centre is a non-specific term of reference usually meant to designate a city as a major participant in international financial markets for the trading of cross-border assets. An international financial centre (sometimes abbreviated to IFC) will usually have at least one significant stock market as well as other financial markets, as well as being subject to a significant presence of international banks.
Depending on how restrictively the term is interpreted, there are either three international financial centres or three acknowledged leading international financial centres:
- London, home of (amongst others) the London Stock Exchange, AIM (the world's largest small-cap exchange) and Lloyds of London insurance market.
- New York, home of (amongst others) the New York Stock Exchange (the world's largest by capitalisation), the NASDAQ and the Securities Industry and Financial Markets Association.
- Hong Kong, which has the largest Asian stock exchange.
However, most definitions would also consider the following to be IFCs:
- Chicago, home of the leading derivatives markets: Chicago Board of Trade, Eurex and Chicago Mercantile Exchange.
- Frankfurt, home of the Frankfurt Stock Exchange (Europe's second largest) and Xetra.
Other cities are sometimes referred to as IFCs, or "regional IFCs" or as potential or future IFCs. These include:
[edit] Offshore
The term 'international financial centre' is sometimes used loosely to refer to what is more commonly called an offshore financial centre; sometimes referred to as tax havens (although some disagreement exists about the interrelation between the two terms).
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