According to the Geneva-based non-governmental organisation, Hong Kong is also the first Asian country to top the scoreboard, in the WEF’s annual report released Tuesday.
Launched in 2008, the ranking is based on efficiency and size of banking and other financial services, the business environment and financial stability amongst other things.
It is also the first time neither the United States nor the United Kingdom took the top spot since the WEF began the survey four years ago.
The United States fell to second place while the United Kingdom settled for third place, mainly caused by a decline in its initial public offering activity and securitisation.
"While Western financial centres are understandably focused on short-term challenges, this report should serve as a wake-up call that their long-term leadership may be in jeopardy," Kevin Steinberg of the WEF said.
Hong Kong jumped three spots to get to the top, boosted by high scores in the non-banking financial services segment such as IPOs and insurance.
Other Asian financial hubs like Singapore and Japan remained in the top ten rankings. Australia, Canada, the Netherlands, Switzerland and Norway made up the rest of the top 10.
China rose three places from last year to 19th whereas euro zone countries slipped in the rankings as they struggled to contain their debt crisis, including Germany which dropped one place to 14th.
According to the WEF report, more than 90 percent of countries have not returned to pre-crisis levels in terms of ease of access to credit and loans, venture capital availability and financing through local equity markets.
"The challenge will be how to encourage economic activity while not fuelling the next credit bubble, which could cause severe consequences down the line," said Isabella Reuttner, senior project manager at the WEF and editor of the report.