The Role of Financial Centres in Regional Development. The Impact of Globalisation on Regional Money Markets

Abstract

Historic experience has shown that the level of development of financial relations has a major impact on the economic and social development of various geographic areas. This level of development can be put down - among many other factors - to geographic features. The rise of international financial centres has enhanced the development of the world market, but at the same time, it has weakened the role of small and medium-sized towns because global and local economic, political and economy policy processes are closely related. Enterprises that once were established in small towns have become the subsidiaries of large multinational companies. As a result, their corporate centres were also relocated into large financial centres. Communication and information technologies further strengthen the role of only a few cities and undermine the traditional autonomy of several smaller cities. The functions of international financial centres have significantly been extended, they essentially pursue universal activities, whereas regional centres are functionally specialised. These days, we could hardly find a spot on the world map which in the context of financial relations could remain untouched by the impacts of the network of financial centres. Financial centres are extremely different institutions, communities both in functional and regional terms. In many cases, they are extremely difficult to define. There is no agreement either among experts or in literature on the definition of “financial centre”. However, the role of centres in modern economic and regional development is undoubtedly significant. Financial centre is a complex economic category, which can only be defined in formal rather than in content-related terms, their economic and spatial impacts are extremely complex and their analysis would go beyond the limits of a dissertation.