Britain's banking system is not a national asset. It's a curse

[steve2470]

http://www.guardian.co.uk/commentisfree/2013/may/30/britain-banking-system-curse

Even after more than five years of traumatic financial and economic crisis, Britain's banks are often still presented as a source of national strength that must be shored up by taxpayers and protected by politicians.

But the claim that our outsized banking system is a prized national asset just doesn't stand up to scrutiny. True, the taxes paid by the financial sector in the boom years will probably just about cover the price tag for the bailout – but they don't come close to meeting the other costs of the financial crisis, including the deepest recession in living memory.

More fundamentally, though, the wider economy is extremely poorly served by the financial sector. Since the "big bang" deregulation in 1986, banks have dramatically outperformed those in every other sector. At the very least that must be cause to wonder whether they have been making excess profits, at the expense of the rest of the economy.

Britain's longstanding problems of a chronically low investment-to-GDP ratio, and a well-documented "funding gap" for mid-sized firms certainly suggest the financial sector has done a poor job of channelling savers' funds to where they can be used most productively – the most fundamental role of banks.

[Laelth]

1. k&r for the truth, however depressing it may be. n/t

-Laelth

[Ghost Dog]

2. Bang on target.

- Ghost Dog.