Weightings

The second component of the FSI is the global scale weight (GSW) attributed to each jurisdiction. It assesses the size of each jurisdiction’s share of the global market for financial services provided to non-residents.

The GSWs use publicly available data about each jurisdiction's trade in international financial services.

The preferred data source is the IMF’s Balance of Payments Statistics (BOPS), which provides data on international trade in financial services. Where this data is not available, we extrapolate from IMF data on stocks of internationally-held financial assets to derive trade or flow estimates. (This follows the methodology of an IMF working paper by Ahmed Zoromé published in 2007.) Where neither assets nor financial services exports are reported, we use liabilities data to extrapolate values of assets and to assess the reasonableness of reported assets.

Using this methodology, we create flow data, whether direct or extrapolated, for 222 jurisdictions, covering the large majority of the global provision of financial services to non-residents. Finally, to create our GSW, we take the data for an individual jurisdiction then calculate its share of the total for all 222.

We believe it is an important flaw in international statistics - and hence in the clarity of understanding international finance - that the flows we are trying to measure are not consistently captured. Given this context, we believe our methodology represents the most robust possible use of the available data to evaluate jurisdictions’ relative contribution to the global total of financial services provided to non-residents. One remaining uncertainty is the extent to which flows related to the management of legal entities and arrangements such as trusts, foundations, shell companies and the like are covered.

See our GSW methodology explained in more detail here.