Could the UK banking sector tip into terminal decline?
The head of the British Bankers Association (BBA), chief executive Angela Knight, has suggested that the UK banking sector could tip into a similar decline seen in the steel and shipbuilding industries. Unless the UK government and UK regulators "go easy" on the sector in the medium to longer term there is the potential, in the eyes of the BBA, for the sector to tip into a very difficult and long-term decline. But is this really possible?
The truth is that the UK financial sector, although under pressure at the moment and seen as the devil incarnate by many, is the centre of the UK economy. If the financial industry was to continue struggling and indeed turned back towards a recessionary period then there is no way that the UK economy could push ahead and grow. Such is our dependence upon the financial sector, both personally, for business and for investment that a permanent decline in the sector would be a very difficult scenario to say the least for the UK government and UK regulators.
The last few days have seen various comments from various different parties with different axes to grind giving very different impressions about the future of the UK financial sector. The truth is, at some point the UK government will need to reduce the tax burden on the sector and indeed the regulatory framework will at some stage in the future be loosened. End of story......
Share this..
Related stories
Will unemployment peak at 2.8 million?
The Chartered Institute of Personnel and Development (CIPD) have today issued a revised forecast regarding unemployment in UK with a suggestion it could peek at 2.8 million in 2010. While an increase from the current 2.5 million to 2.8 million would obviously be unwelcome, it is a sharp reduction in the Institute's initial forecast of 3.2 million peak. So is the UK economy recovering quicker than...
Read MoreCould the UK economy really move back into recession?
All of the political parties have this week warned to some extent about the risk of recession in the UK if they're competitors are voted in later this week. The Conservative party believes that the Labour Party will spend, spend and spend again while the Labour Party is accusing the Conservatives of taking money out of the economy and risking a slowdown in activity. The Liberal Democrat party is s...
Read MoreHigh-profile investors split on UK economy prospects
As if the situation regarding the UK economy was not difficult enough we have seen two well-known investment managers in the press this week stating their very different views on the future of the UK. Firstly it was the turn of Anthony Bolton, a former manager of the Fidelity Special Situations Fund, suggesting that "all of the pieces" for a true bull market in the UK are in place.
...
Has the Greek rescue package hit the buffers?
Speculators in the currency markets have targeted the euro amid concerns that the expected rescue package for the Greek economy may well have hit trouble. Despite growing concerns expressed by Europe's larger banks it seems as though the European Union is unable to reveal details of any package at this moment in time. Should we be concerned or should we await further details? While rumour and c...
Read MorePrudential boss leads the way in call for change
Tidjane Thiam, the boss of financial giant Prudential, has today declared that the whole of the UK financial sector needs to change to ensure the crisis the UK is now leaving is not repeated in the immediate future. There is now a greater push for change in the UK financial sector and we are starting to see big names and big business realise the time has come! These calls for change will be mus...
Read More