Investment banking centres since Lehman Brothers

Advanced Producer Services (APS) are complex, highly interconnected and crucial to understanding globalisation, urbanisation, and financialisation. Importantly, they are also hierarchical, with investment banks arguably at the top of the hierarchy. Recognising the role of investment banks as key financial and economic agents, this paper asks how the geography of investment banking centres has changed since the collapse of Lehman Brothers in 2008. Our results show that while global investment banking activity has shrunk dramatically, and New York and London still dominate as financial centres, the shift of activity to Asia-Pacific has accelerated since 2008, with Tokyo and Mainland Chinese centres as the main winners, and Frankfurt and Zurich as the main losers. Our findings also indicate that since the crisis investment banks conduct much more of their transactional business out of their headquarters and less out of their branches and subsidiaries, most likely the result of cost cutting, financial regulation and technological advances. This has led to the reversal of the 'Wimbledon effect' in London, and a relatively poor performance on Hong Kong and Singapore. At the same time, many large banks have continued to offshore back- and mid-office functions, including IT and compliance, to lower cost locations, with India in the lead. The paper discusses implications of these patterns and trends for the sector, cities and their networks, and the governance of global finance. We also speculate about the potential impact of Brexit on the landscape of investment banking.