The 11th century. It is believed that primary financial centers were formed during annual fairs in Europe. For example, St. Giles’ Fair near Oxford or the Autumn Fair in Frankfurt.
So, where was the very first international financial center formed? It is accepted in the economic literature that it was the city-state of Venice, which reached the peak of its development in the 14th century. Namely in Venice (and also in Genoa) such securities as bonds, which are widely used in the modern world, were introduced into circulation.
The 17th century. Amsterdam becomes the main financial center of the world. It held leadership for more than 100 years (this period is known as the Dutch Golden Age). Three extremely important novelties, which predetermined the whole financial development, were introduced in Amsterdam:
- The first world public company – United East India Company (VOC) – was founded in 1602. The VOC foundation is considered to be the official start of globalization, because the East India Company was the first one, which used the transnational corporation form.
- The first stock exchange in Amsterdam was founded at the beginning of the 1600s. The capital market started to function on its basis.
- The Bank of Amsterdam (Amsterdamsche Wisselbank) was founded in 1609. It is rightly considered to be the first example of the State Central Bank.
London replaced Amsterdam by the beginning of the 1800s. The British capital became the world center of lending and investing. Not only the capture of colonies facilitated it but also the English contractual law, which was widely disseminated in the sphere of international finance. London law and finance institutions provided services at the international level (for example, Lloyd’s of London, which was founded in 1686 and which functions until now).
London continues to play the leading role as the International Financial Center at the beginning of the 21st century. It is interesting that namely the capital of Great Britain has the highest positive trading balance in the sphere of financial services. The London Stock Exchange, the global gold market and bond market are located here. The national FCA (Financial Conduct Authority) regulator controls operation of about 58 thousand financial firms, which:
- provide working places for 2.2 million specialists;
- pay about GBP 65.6 billion as taxes.