Role Of Financial Sector On The United Kingdom

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"Barclays boss Bob Diamond has said that taxpayers should not bail out banks, and that those banks that get into trouble should be allowed to fail."

The role of the financial services is vital to the United Kingdom, as it gives support to businesses and enables the economy to grow. The sector offers products and services which has a significant impact on the UK’s economy and forms one of the few world-class sectors.
The significance of financial sector in an advanced economy implies that it is fundamental for financial development to provide support for a focused and strong money related framework that is free from citizen support and is coordinated globally. The CBI 's exceptional cross-segment voice talks for the clients of
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The UK has an exchange surplus in financial and insurance activities, i.e. Fares surpass imports in the division. The exchange surplus has been developing as an extent of GDP in the course of the most recent two decades, and in spite of the fact that it dropped in 2008 it has since recovered. In 2013, the surplus on pensions and insurance was £20.9 billion and £38.3 billion on financial services. ‘These two sectors therefore account for a large proportion of the services trade balance of £78.9 billion’ (Tyler, 2015)

Why Banks need to be regulated

Banks are defenseless against self-fulfilling panics in light of the fact of their liabilities being transient and unequivocal, while their assets are long haul and illiquid. The unimportant prospect of insolvency is the thing that makes banks powerless against fulfilling toward oneself panics. In the event that a contributor suspects that different contributors will withdraw their trusts in the future, it is sane for that investor to race to the bank and withdraw his or her deposits before different investors can do as such. Also, since this rationale holds for all contributors, banks are liable for fulfilling panics in which it is the confidence in a run which causes the run.
To keep more extensive budgetary aftermath from such panics, governments have solid
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