Bermuda has slipped down the world rankings for top financial centres according to the latest report published by the City of London.

Hamilton dropped eight places from 17th to 25th, losing 41 rating points in the process, according to the Global Financial Centres Index for September 2007, which is written by Z/Yen Group.

The report was first published in March to give an indicative rating of the competiveness of the world's major financial centres, ranking them against each other and identifying the changing priorities and concerns of finance professionals.

It shows the top six centres from the first report have maintained their position the second time round, with London stretching its overall lead over New York from seven points to 19 in all five areas of competitiveness including people, business environment, market access, infrastructure and general competitiveness.

Meanwhile, New York opened up its advantage over of Hong Kong and Singapore to 90 points, as Zurich, with its focus on private banking and asset management, came in fifth and Frankfurt held onto sixth place, while Geneva jumped three places to seventh.

But Hamilton, along with the likes of Wellington in New Zealand, Warsaw and Lisbon, and Asian giants Shanghai and Beijing, all fell, as Luxembourg leapt nine positions to 17th and the emerging markets of Dubai and Mumbai rose slightly.

The report describes Hamilton as a "niche financial centre", but while it is considered a world leader in reinsurance, scoring highly in that sector, it would almost certainly never rival places such as London and New York as a global financial centre despite matching them within their own specialist area.

Indeed, Bermuda's capital is ranked almost halfway between being a leader, with a strong sub-sector and domestic market, and a minor centre, unlikely to improve in the short term, listed close to the likes of some of Europe's finest in the form of Brussels, Helsinki, Madrid and Milan.

It is rated among the chasing pack in terms of the spread or variance of the individual assessments given to each centre, with some respondents surveyed ranking them highly and others viewing them as poor.

When compared to fellow offshore competitors, several observers were surprised to see the likes of Hamilton, the Channel Island and the Cayman Islands in the top 20 of the first report, and in the second edition they have regressed to be overtaken by new entrant the Isle of Man, which has come straight in at 21st place.

The report said: "Offshore centres are very important financial centres that offer low (or no) taxes, political stability, 'business friendly' regulation and, above all, discretion.

"The positions of the leading off-shore centres are remarkably clustered with the Isle of Man, Dubai, the Channel Islands, the Cayman Islands and Hamilton in 21st, 22nd, 23rd, 24th and 25th positions.

"Some see offshore centres as a weak link in their financial services industry, but there is no denying their importance.

"Offshore holdings are estimated at between $5 and $7 trillion - five times as much as 20 years ago and representing up to eight percent of total global wealth.

"Financial services have served these centres well and Gross Domestic Product (GDP) per person in these islands is very high.

"Hamilton heads the global list of GDP per person."

A total of 163 assessments were carried out on Hamilton, with an average assessment receiving 520 points.