The current turbulence in the US financial market has really hit the American economy hard, and not just that, according to the WEF or the World Economic Forum, the US has lost its position as the world’s leading financial center. Britain currently holds this position. But the great news is that, Australia has gone up the rankings remarkably by nine positions and now holds the number two spot. Britain and Australia are followed by the US, Singapore and Hong Kong. Interestingly, both France and Germany have gone out of the top 10 countries.

Often, financial development is taken very seriously to assess the wider economic growth, prosperity and welfare. This is in line with the current scenario where in the US, banks and other financial institutions are failing, people are losing jobs and naturally the prosperity levels are going down too. The positions reveled by the World Economic Forum also proves the fact that the Australian economy has not been that severely affected by the economic downturn.

The rise of Britain has been attributed to the strength in banking and also non-banking related activities like insurance. However Britain’s top position was somewhat tarnished because the WEF also held the country lower than Panama, Nigeria and Bangladesh in financial stability. This is because of exchange rate worries, poor managing of government and private debt and property bubbles.

Since these issues are not that much relevant in Australia and since the financial stability here is much better, it propels the Australian financial sector to even higher positions.

The forum also noted that it increasingly seems that the financial dominance of UK and the USA might see a significant drop in the future and thus their leadership might be in jeopardy. The economies such as Australia, Singapore and Hong Kong might be where the action will be in the years to come.

This news is sure to be taken very positively in the ASX as the stock market tries to recover even more from the lows seen in March 2009. Incidentally, the Australian securities market has already risen quite remarkably in the last few months, and there are no signs that this rise might be coming to a halt anytime soon.

Popularity: 7% [?]