A historic leader faces new challenges: New York City in the global banking system of the 1970s-2010s

The article is focused on evolution of New York's positions in the global banking system over five decades: from the beginning of the 1970s until the present days. The study is based primarily on large statistical massifs, including annual rankings of the largest banks of the world (from the London-based The Banker magazine), and macroeconomic data from the United Nations Statistical Division. Besides, non-quantitative information (for example, memoirs and publications in periodicals) was also widely used. The investigation shows that after decades of obvious leadership (1930s - 1960s), New York faced quite different realities. Relatively slow growth of national economy caused gradual decreasing of the US share in the global GDP. At the same time the Bretton Woods system of monetary management, in which the US dollar played the central role, ceased to exist. On the other hand, by the 1970s there were outstanding industrial breakthroughs in some other countries, especially in Japan. These events also affected the credit sector: in 1972-1973, Tokyo surpassed New York in terms of total assets of local banking corporations and became a new global leader. The offensive of foreign competitors, along with some other factors, was perceived in the USA as a signal to reform the national banking system. In this sector, some of the historical restrictions that hindered its development were lifted during the second half of the 1970s and the first half of the 1980s. Nevertheless, the superiority of Japanese banks remained overwhelming, especially after the yen's revaluation in 1985. So, the entire period of the 1970s and 1980s can be considered as the time of the “Japanese challenge” or even the “Japanese domination”. However, the situation changed dramatically in the early 1990s, when a severe crisis in the real estate and stock market dealt a powerful blow to the positions of Tokyo. Besides, in the United States at the same stage, the work on the liberalization of banking legislation was resumed. Although Tokyo still was the largest banking hub in the world, New York and some other cities have noticeably reduced the gap from the leader in this decade. Finally, another fundamental shift in the global banking area occurred at the beginning of the 21st century. This was due primarily to the phenomenal economic growth of the PRC and the strengthening of Beijing's position as a world banking center (analogous to the rise of the Japanese economy and following financial advance of Tokyo at the previous stage). In the 2010s, Beijing has become the undisputed global leader in terms of banking assets. Nevertheless, the cities in the following ranking positions (primarily, New York, Tokyo, London, Paris and Frankfurt) also play a very important role in the contemporary credit system. Thus, despite some retreat under the pressure of foreign competitors, the huge financial and professional resources allowed New York to remain among the most important banking nodes in the world.

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