One of the constant themes of financial policy in the Gulf region over the past decade (the length of time I have been writing about it) has been the race between regional cities to become the “premier” financial marketplace. The policymakers themselves are often coy about it, declining to suggest they are participating in a competition, and always highlighting the complementary aspects of their ambitions. They want to make the Gulf Cooperation Council (GCC) region a financial powerhouse in its own right, bridging the gap between Europe and Asia, and contributing to the strategy of diversification away from oil dependency. But privately, there is intense rivalry between them. Bahrain, Doha, Abu Dhabi and Dubai all claim to be a “leading” financial services hub and market themselves to the outside world as such. Saudi Arabia has been slightly different. As the biggest economy in the region, its potential as a financial center is undisputed, and Riyadh has explicitly set out – with the King Abdullah Financial District (KAFD) – to achieve hub status. But the big global financial institutions still prefer to do business with the Kingdom via one of the other centers of the Gulf, or as “suitcase bankers” flying in and out of the Saudi capital for specific deals. Dubai takes GCC lead: For what it is worth, here is a snapshot of how I see the competition over the past decade: Dubai has maintained and even extended its lead for most of that time, with the Dubai International Financial Centre (DIFC) consistently named as the leading financial marketplace in the region. Bahrain has fallen back in the race, mainly because of the disturbances that began in 2011 and which have continued at varying levels of intensity ever since. It will probably never again be able to claim to be the region’s financial capital but may develop lucrative financial specialisms. Doha has the financial muscle, but perceptions about the Qatar Financial Centre (QFC) have been confused. Foreign institutions appear not to like “onshore” status. Maybe the move to a new “Wall Street” style location this year will crystallize thinking. Abu Dhabi was for a long time way back in the race, despite being home to the headquarters of some of the biggest and richest banks in the region. But the opening of the Abu Dhabi Global Market (ADGM) as an independently regulated center two years ago has given it fresh impetus and it is coming up fast. (Apologies to Kuwait, which, although undoubtedly a hub for business in the region, is hardly ever seen as a financial center.) London calling – but for how long?: This line of thinking was sparked by the publication last week of the 21st edition of the Global Financial Centres Index (GFCI). Compiled by London-based Z/Yen Group in partnership with the Shenzhen-based China Development Institute (CDI), the index is a twice-yearly league table of around 90 cities that claim financial center status. The index is held in high regard for its rigorous methodology. The top line from the latest survey is that five centers – in order London, New York, Singapore, Hong Kong and Tokyo – remain the leading financial hubs in the world. No surprise there, but beneath the straight rankings there are some significant trends that tell a lot about the current state of the world. Both London and New York fell in the ratings (though not in the rankings) in light of the challenges their home countries face. London, of course, has to deal with the ongoing repercussions of the Brexit vote and a possible exodus of financial institutions from the Square Mile. It is too early to say how this will pan out, but the consensus is that London will lose at least some business from banks wanting to keep unrestricted access to the EU. What is surprising, however, is the lowly rankings of London’s main European rivals: Frankfurt (23), Paris (29) and Brussels (55) are miles behind. New York’s relative decline is perplexing. Wall Street has had a boom period since Donald Trump’s election as president, so it cannot be to do with the health of the market. The Z/Yen assessors obviously think it is too good to be true in the long term. The other big trend in the index is the inexorable rise of the East. Singapore remains the pacesetter (and the model for many embryonic financial centers around the world), but Hong Kong and Tokyo have also eaten into the West’s advantage. In the Middle East, Dubai (25) remains the leading center but slipped seven places in the rankings. I can only think this is because of rising competition from the new ADGM, which helped the UAE capital to a leap into 28th place. Doha showed a respectable rise to 39, while Bahrain was almost unchanged at 57. Maybe the most significant regional riser was Riyadh, which jumped six places to 76. That was entirely due to the renewed financial interest in Saudi Arabia because of the impending initial public offering (IPO) of Saudi Aramco, the big bond program the Kingdom is running, and the rest of the financial aspects of the National Transformation Program (NTP) 2020. That trend looks certain to continue for Riyadh. The bankers will have to buy bigger suitcases.