GLASGOW has overtaken Edinburgh as Scotland's most important financial centre in the latest ranking of the world's economic hotspots.

The biannual Global Financial Centres Index shows that Glasgow dropped 11 places to 50, but was still ahead of Madrid, Beijing and Bangkok.

However, the Scottish capital slumped even further, down 17 spots to 54 in the list, a reflection of the turmoil that has swept through the Scottish banking centre in recent years.

The slump in the ratings was described as a "wake-up call" by the Glasgow Chamber of Commerce.

According to the report compiled by commercial think-tank Z/Yen, Glasgow is now the second-most important financial centre in the UK after London, which kept its position at the top of the list of 77 cities and regions, ranked in terms of competitiveness and ease of business.

But Paris, Zurich and Geneva saw higher year-on-year increases than London. Frankfurt also broke into the top 10 for the first time in the history of the twice-yearly survey.

The chamber's chief executive Stuart Patrick said: "The impact of the financial crisis has been severe for established centres like Edinburgh and Glasgow.

"The index shows we are holding up in terms of scale, but it's obvious that centres in other economies are moving faster into regrowth. While Glasgow can take small consolation from a lesser fall in the ranking, this is undoubtedly a wake-up call for both of Scotland's financial centres, reminding us how much we have to do to repair past damage."

The researchers said London's ratings seem to have been "unaffected" by the scandal surrounding Libor rate-fixing scandal, where traders colluded to fix the inter-bank lending rates.

London, New York, Hong Kong and Singapore remain the top four centres, with the gap between the Far Eastern rivals now only two points. Of the offshore financial centres, Jersey scored the highest.