London and New York were tied for first place in the latest Global Financial Centres Index (GFC 7) report, published last Friday by the City of London Corporation. They were followed by Hong Kong and Singapore, while Dublin got a ranking of 31 in a 75-city sample.

The data was collected between July and December 2009, a period of considerable volatility as the global economic recovery got underway. London (-15 points in the ranking to 775 from 790) was one of four centres to see a decrease in its ratings (Shenzhen (-25), Guernsey (-6), and Dublin (-1)), despite an overall return of confidence. Meanwhile, New York (+1) held steady in the face of concerns over the regulatory environment.

Asian centres continued to make gains, with Hong Kong, Singapore, Tokyo, Shanghai and Beijing, in particular, all recording strong performances. The study, the seventh of its kind produced by Z/Yen Group, also indicates that the gap between the top two and Hong Kong in third has narrowed. It now stands at 36 points, down from 45 in GFCI 6 and 81 in GFCI 5. The GFCI is a bi-annual publication.

Stuart Fraser, Policy Chairman at the City of London Corporation, said: "Although London and New York have always led the pack, this research is a wake-up call for decision-makers that our standing as a world-leading global financial centre should not be taken for granted. Damage has been done to the Square Mile's perceived competitiveness relative to New York but this is not irreversible provided the new incoming government – regardless of political persuasion – makes a clear, positive statement on their "direction of travel" with regard to tax and regulation. Not everything can be achieved at once but businesses need confidence that over the longer term the government of the day is supportive of the financial services industry as a wealth generator for the UK economy.

'We cannot afford to be complacent in the face of growing competition across the world, not just in the USA but also increasingly Asia. There is a danger that new regulation could accelerate this shift in the financial centre of gravity towards fast-developing markets by undermining the UK's competitiveness. Industry and government must work together to ensure that this does not happen."

GFCI 6, published in September 2009, showed a general return of confidence among respondents - - -with all but three centres (Dublin, Glasgow and Gibraltar) recording stable or higher results than previous ratings.

The GFC report tracks the underlying competitiveness of financial centres. The rankings are compiled by the independent Z/Yen Group from surveys of finance professionals around the world and competitiveness indicators.