Lord Turner, chairman of the UK’s Financial Services Authority, casts a sceptical light on the role of the City of London in the UK economy in an interview with Prospect Magazine. During the last boom, the financial sector grew as a share of gross domestic product, and ballooned as a share of profits and taxes. Should the government have as a goal to protect the City as a pre-eminent financial centre? Or has the City grown too big for Britain’s good? Lord Turner says the City watchdog should be “very, very wary of seeing the competitiveness of London as a major aim” and has made a robust defence of his idea for a global tax to curb the “swollen” financial sector. Which British industries – if any – have the potential to replace the City? Does the UK have any choice other than to nourish the financial services industry? Join the debate: click on comment.
Video: Lionel Barber, FT editor, interviews Lord Turner
Lord Turner says that investment banks should produce “living wills” if things go wrong and he proposes a debate on the need to simplify the banks’ legal structures.
Willem Buiter: Forget Tobin tax, there is a better way to curb finance
Lord Turner, chairman of the UK’s Financial Services Authority, has set the cat among the financial pigeons by making highly critical comments about the City of London and financial intermediation in general. He recommended some drastic remedies, and suggested considering a global tax on financial transactions – a generalised Tobin tax.
John Plender: Bias against innovation
Four decades-worth of extraordinary financial innovation were, until recently, regarded as cause for congratulation among Anglophone policymakers and bankers. The events of the past two years have put an end to that.
Andrew Hill, Lombard column editor: Bonuses for humdrum trading are not the FSA’s concern
The decision about what to pay someone for merely dipping a hand in the day-to-day flow of capital markets lies with management, investors and – if action is required – policymakers.
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