Bank of England governor Mark Carney says the UK financial services sector could double in size over the next 25 years becoming 20 times as big as the country’s total GDP.
However, in an interview with The Guardian he warns that a financial sector that size comes with risks and that the UK should resist a regulatory race to the bottom post-Brexit in an effort to compete with light-touch regimes such as Singapore.
Assets held by banks, pension funds, insurance companies and other players in the financial services sector currently dwarf the UK’s £1.9trn GDP by around 1,000 per cent.
Carney says: “If the UK financial system thrives in a post-Brexit world, which is the plan, it will not be 10 times GDP, it will be 15 to 20 times GDP in another quarter of century because we will keep our market share of cross-border capital flows. Well then you really have to hold your nerve and keep the focus.”