Hierarchical tendencies, functional specializations, and (in)stability across European banking centers

Jan Musschoot, Ben Derudder, Sabine Dörry

Research output: Contribution to journalArticlepeer-review

Abstract

Drawing on conceptual research exploring how evolving geographies of finance inform urban and regional change, we examine the size and functional scope of the presence of leading global banks across functional urban areas in Europe. Based on data for 100 major global banks, we find that their overall presence is proportional to (the square root of) the national gross domestic product. London and Luxembourg host far more banks than can be explained by their national gross domestic product, which can be traced back to their export of banking services. We also analyze the geographies of specialized banking services per city. Corporate and investment banking are mainly explained by national gross domestic product, with London emerging as the most prominent center. Private banking and securities services, in turn, are largely independent of national gross domestic product and rely on the importance of small and specialized economies such as Luxembourg and St Helier (Jersey). The stability of Europe’s banking centers is underpinned by their role as the national banking center and/or their specialization in international banking services, as well as manifested in specialized subnetworks of financial centers.
Original languageEnglish
Pages (from-to)446-464
Number of pages19
JournalEuropean Urban and Regional Studies
Volume30
Issue number4
Early online date15 Mar 2023
DOIs
Publication statusPublished - Oct 2023

Bibliographical note

Funding Information:
The author(s) disclosed receipt of the following financial support for the research, authorship, and/or publication of this article: The research leading to this paper received grant funding (G0A9617N) from both the Flemish Fund for Scientific Research (FWO) and the Luxembourg National Research Fund (FNR).

Keywords

  • Banking centers
  • Europe
  • financial centers
  • London
  • Luxembourg

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