Turkey Prime Minister Ahmet Davutoglu wrapped up his visit to Britain on Wednesday by signing an important agreement to help develop Istanbul as an international financial center, a long-term goal announced by Turkey that straddles between Europe and Asia.

"The London Stock Exchange, one of the oldest stock markets in the world, decided to cooperate with Borsa Istanbul on many areas," Davutoglu said after signing a strategic deal between the two stock exchanges.

Istanbul is a historical economic power and London is the capital city of the modern economy, and the unity of these two cities is important for both the European and the global economy, Davutoglu added.

The deal covers cooperation on derivatives and index products which will allow leading Turkish stocks to be traded in London derivatives market later this year.

"This was an important step toward the goal of making Istanbul as a financial center after entering into cooperation with London stock exchange that followed an earlier agreement between Nasdaq and Borsa Istanbul," Davutoglu explained.

Turkey's ambition to have Istanbul serve as a financial hub in the region started five years ago and was included in the government program as well. The government designated Istanbul's Atasehir district as a major financial hub and the city's primary business district. The project is slated to be completed in 2016.

The project was criticized, however, for moving slowly when the Turkish Union of Chambers and Commodity Exchanges (TOBB), the largest business advocacy group in Turkey, said in a report last year the government has yet to consolidate its product-service range and remove certain legal obstacles for the project.

Istanbul has to compete with other cities in this ambitious goal such as emerging cities Warsaw, Abu Dhabi and Dubai, all of them are trying to attract investors with new financial incentives, as well as traditional and well-established cities such as London.

Turkey is also seeking to make best use of the G-20 term presidency it took over as of Dec. 1, 2014 to promote Istanbul as a financial hub.

The year 2014 was a challenging year for Turkey, however, amid the low growth and the corruption scandal that shook the government. The government's controversial steps in interfering into rule of law and alleged pressure on businesses through auditing and fines cast a shadow on Istanbul project.

"If rule of law is shelved, independent boards are no longer independent and corporations and banks are treated as toys of the government, can that country be a safe harbor for investors?" Turan Bozkurt, an economist wondered.

"With this mentality, you cannot make Istanbul a financial center. You can only make it a center for unearned income from the real property speculations," he added.

Bozkurt's comments echoed similar remarks made by Mayor of London Fiona Woolf who visited Istanbul last year to strengthen bilateral economic ties between Istanbul and London.

Fiona, whose office's main role is to serve as London's financial ambassador abroad, said "for cities to become successful financial centers, they must have stability, openness and effective regulation."

The London mayor stated that transparent regulations, presence of highly skilled people, strong infrastructure, a predictable and effective legal framework and the ability to resolve disputes efficiently among factors that must be emphasized in order to attract investors and make Istanbul as financial center.

During the visit to London, Davutoglu disclosed that the visit was planned shortly after a new government was established five months ago for the purpose of explaining Turkey's economic potential, past achievements and goals for the year 2023, a centennial of the establishment of the Republic of Turkey.

The trade volume between the two countries was recorded as 15.1 billion U.S. dollars in 2013, up five percent compared to 2012. In the first 11 months of 2014, the latest available data by the Turkish government, the volume increased by six percent, reaching 14.6 billion U.S. dollars compared to the same period in 2013.

In London, Davutoglu was accompanied by Deputy Prime Minister Ali Babacan who is responsible for the management of Turkish economy, Finance Minister Mehmet Simsek and Tourism and Culture Minister Omer Celik. He met with his counterpart British Prime Minister David Cameron as well as representatives of finance and investment industries in London.

Cameron said that Turkey and Britain have strong economic ties, stressing that both countries must work together on Ukraine crisis and threats posed by the Islamic State (IS) militant group.