London's reputation needs rebuilding, the report said
London's status as a major global financial centre is under threat from factors including knife crime and poor public transport.
A report commissioned by the mayor of London found that emerging Asian and Middle Eastern economies are attracting investment and jobs away from the city.
It found complicated tax systems and the high cost of living also puts businesses off locating to the capital.
The report's authors recommended creating a new body to promote London.
The body would bring together the Greater London Authority, the City of London corporation and business groups.
London Mayor Boris Johnson said: "I will pull out all the stops to protect London's position as the world's premier financial centre and emerge from the downturn stronger than ever.
"I will not stop until I lobby whoever it takes to remove the obstacles that are putting London's global reputation at risk from the new kids on the block chomping at our heels."
The mayor commissioned the report in June to examine the City's competitiveness as a financial centre.
It was compiled by a panel of senior business leaders, chaired by Bob Wigley, chairman of Europe, the Middle East and Africa at Merrill Lynch.
He said: said: "Our recommendations start with the industry supporting the authorities to rebuild London's reputation for leading global financial regulation and to restore trust in doing business in London."