How can the International Financial Cycle Affect Interactions between Information Technologies and the New Role of Global Cities?

Summary. The emergence of new information technologies is often said to reduce the importance of cities as financial centres. In this paper, several arguments against this view are developed. First, in the financial services industry electronic information transmission, data processing and trading is not an entirely new phenomenon. Information and telecommunications have been changing the structure of the financial system by lowering transaction costs and reducing asymmetric information. Second, with the electronic grids of financial institutions spanning the globe being inherently nodal even in the age of virtual finance location still matters. Third, the myth of the "dissolution " of cities is based on the assumption of a perfect separation of virtual and real activities that, at a closer look, does not hold