Rebalancing the Geographies of Financial Services Power : The Role of Sovereign Wealth Funds

Studying sovereign wealth funds (SWFs) can tell us a lot about the financial services sector. Specifically, in this commentary I suggest that studying the reactions of financial service providers, such as asset managers but also the broader complex of professional services such as accounting and law that ‘lubricate' (Dicken, 2007) the financial system, to the growing importance of SWFs reveals much about the dynamics of the changing geographies of power in the financial services sector and the implications for incumbent financial centres such as London and New York. I make two main points. First, I suggest that the growing importance of SWFs does indeed mean that financial centres such as Doha, Dubai and Shanghai will become increasingly powerful over the coming years, in particular as financial service providers such as asset managers and related professional service firms such as law race to establish new and grow existing operations in these centres. Second, however, I also contend that this rebalancing of power relations will not be a zero sum game that necessarily leads to the erosion of the power and importance of incumbent centres such as London and New York. By taking a relational approach to understanding the geography of financial centres (on which see Beaverstock et al., 2006; Faulconbridge, 2004) that recognises the complementary nature of coexisting centres (on which see Clark, 2002) I illustrate the way that incumbent centres are actually likely to benefit from the activities of SWFs and the growing importance and power of centres such as Doha, Dubai and Shanghai