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The Curse of the UK Financial Sector?

Discussion in 'off topic' started by droodzilla, Mar 12, 2019.

  1. russel

    russel ./_dazed_and_confused


    A very good example of "whataboutism" to deflect from a point and a straw man thrown in for free. I stated quite clearly that I wanted an end to the disproportionate influence the city has on policy including an end to the opaqness that allows money laundering to be carried out on an industrial scale.
     
    Sue Pertwee-Tyr likes this.
  2. Bananahead

    Bananahead pfm Member

    Let's kill the UK finance industry and get all those pension funds managed out of Zurich...... ( I need the money )
     
  3. dweezil

    dweezil pfm Member

    Do you have a problem with those who redistribute wealth from USA and Europe to UK?

    Almost any commerce can be viewed as redistribution
     
    Gaycha likes this.
  4. dweezil

    dweezil pfm Member

    If you kill the FI you might prefer to have than pension managed in Zurich!
     
  5. Jim Audiomisc

    Jim Audiomisc pfm Member


    I agree that simply lining all the bankers up against a wall and deploying machine guns would be satifying, but wouldn't help much beyond that. However we need to take action to *change* the current situation, and dealing with 'The City' is a big part of that situation. So the alternative isn't to "leave them alone". It is to start making changes that shift the economy away from 'The City' to other sectors, etc.

    That means altering the regulation and scrutiny applied to 'The City' in a suitable way, and ensure they help our economy rather than exploit it.
     
    Covkxw, russel and Snufkin like this.
  6. h.g.

    h.g. pfm Member

    I was trying to get across that the financial industry is not like other industries when it comes to wealth. There is a tendency to think that 10% of GDP as financial services benefits the UK in the same was as 10% of GDP as manufacturing. It doesn't because the former primarily redistributes wealth whereas the latter primarily creates it. This difference is important to the health of the UK as a whole even if it doesn't matter to individuals within the sectors. If we are to be a robust economy we need diverse and appropriately sized sectors such as service, financial, agricultural, manufacturing,... If we weaken our integration with Europe this diverse and balanced economy becomes even more important.
     
  7. Jim Audiomisc

    Jim Audiomisc pfm Member

    Indeed. Part of the 'redistribution' goes outwith the UK. Part leads to rises in land and property prices in the UK. Part of it hikes the pound. The result is to hamper other sectors and make life more costly for many in the UK. The 'redistribution' outwith the Uk may also dodge tax and other scrutiny, so we lose out that way as well.

    Hence attempts to compare the 'income' provided by 'The City' with other sectors simply by quoting a big number generally fail to reflect the reality of what happens. It doesn't compare like with like in a meaningful manner.
     
    Covkxw and Sue Pertwee-Tyr like this.
  8. darrenyeats

    darrenyeats pfm Member

    Viewed globally, it's true finance is an "overhead". (If I was being mean-spirited, I'd also say transport is an overhead, but that's me ...) But viewed from the UK perspective, the finance sector is capable of - and is - pulling in, on balance, a lot of cash for the UK by selling more financial services to overseas than the UK spends on such services from overseas. In fact, it seems we're better at that than anyone else.
     
    Last edited: Mar 15, 2019
    Gaycha likes this.
  9. Gaycha

    Gaycha Well-Known Member

    Agree. But in the context that The City s not the single largest part of the FSI sector, yet us is inexorably linked to the other parts, it’s not as straightforward as just carving it up.

    The Regs are key part of what had given UK competitive advantage globally. But not all the regs.

    There be dragons for reformers. Could make Brexit look like a stroll in the park. As you say, something does need to be done. And as with Brexit EU etc, it’s all very well pointing out what is wrong and what problems are, but moot unless we have solutions. Something UK seems short on. What’s the old adage, ‘if you are not part of the solution, you are part of the problem”.
     
  10. Jim Audiomisc

    Jim Audiomisc pfm Member

    Again "pulling in" doesn't determine how much then "gets sent out again" - dodging tax along the way. Nor does it take into account the 'opportunity cost' that the current arrangements impose on non-finance sectors of our economy, etc. So a more balanced way to make "income" might actually yeild *more* for us. It might also mean more of the total gets sent to places which currently are disadvantaged relative to London, and thus help deal with all kinds of "excess costs".

    e.g. The way that 'Finance' drags employment into London and the SE. That not only leave other areas with unemployment problems. It also shoves up the costs of living *in London* for the people who find they have to go there to find work. Add in things like the higher state subsidies for things like transport, etc, there as a result.

    The basic point is that our economy *and* society are distorted by the current setup, and really need changing. But understandably, those who who do well out of the current arrangements tend to argue that things are fine and we mustn't rock the boat.
     
  11. Gaycha

    Gaycha Well-Known Member


    You seem to be laboring under the misapprehension that the entire FS sector is centered on London and the SE, in terms of how many are employed, and the associated knock local service employment.

    It's that City Fixation Thang. You are wrong. It might suit yer point

    It is far more geographically disperesed across U.K. beyond the Sqaure Mile that has become so myopic and wrongly defining to so many and in ignorance.

    E.g. A
    RBS. Scotland
    standard life. Scotland
    AViva. Norwich.
    Barclays. CHeadle.
    AXa . BRistol.
    Lloyds. BRistol, Peterborough.
    Etc


    From the top of my head. All with City offices too, but the bulk of employees are in the provinces.

    FS in UK is not about London.
     
  12. Seanm

    Seanm pfm Member

    Come off it.
     
  13. Gaycha

    Gaycha Well-Known Member

    Off what?
     
  14. Gaycha

    Gaycha Well-Known Member

    It employs 1.13m folk in UK. Correct if you have data otherwise. But if not You assume they are all in London?
    Come off it.
     
  15. darrenyeats

    darrenyeats pfm Member

    Next news article, in Las Vegas the gambling sector is far bigger than it should be for a city of that size, so it shall be scaled down to meet the needs of the people and businesses of Las Vegas.

    The same basic fallacy in the OP (but applied to a country) is what some of us object to. But I concur with some of the more reasoned arguments against the status quo.
     
    Last edited: Mar 16, 2019
  16. Jim Audiomisc

    Jim Audiomisc pfm Member

    Your presumtions about what I "think" are incorrect. FWIW I live a lot closer to Edinburgh than I do to London, and know about the way finance isn't *all* in London.

    But that doesn't change the clear reality that a great deal of the work and employment is in London and the SE. And the distribution of employment, unemployment, wages, house prices, state support for transport, etc, mirrors this.

    "The City" indeed isn't a synonym for "London", but the import of what I said remains correct. We have an unbalanced economy that weakens many sectors for the sake of one, and weakens many geographic areas as a result.
     
  17. Jim Audiomisc

    Jim Audiomisc pfm Member

    Perhaps you could give us:

    1) The numbers employed by the finance sector in each region.

    2) Their per-region median/mode/mean incomes by all the revelant means.

    3) How the above compares with the values for all other sectors per-region.

    And the source of the figures.

    etc.

    That would help us distinguish, say, between 'top bankers' who can get themselves high 'bonuses' from people who work in jobs like call centers on a low wage. And we can then avoid only seeing 'top line' numbers that gloss over relevant details.

    I would be genuinely interested to see reliable figures for these thing. As I would, for the amount of the 'surplus' claims that actually passes back out of the UK or simply hikes land/property prices, or dodges tax.
     
  18. tonerei

    tonerei pfm Member

    Would concur with a lot of the views on this thread. My brother-in-law was a professor in Cambridge doing something worthwhile with his Princeton education but once the kids arrived and money needs became important he dispatched himself to London to work for GSacks and MLynch making tons of money and retiring early in the process. I remember my arguments with him about what exact value they bring. In my view little but they earned stupid money for that. I suggested it should be taxed heavily and if you banned all the commodity trading unless you could prove that you could take delivery of the product the world would be a better place. But when you inhabit a world in which you go wizzy wizzy woo and millions appear out of nowhere anybody going with sensible policies will end up at the bottom of the thames encased in concrete.

    The sad thing about all that was the job in Cambridge was low paid and insecure.The system pushed him to where all the money could be earned.
     
  19. dweezil

    dweezil pfm Member

    This happened locally a few years ago; one trader relied on non delivery defaults either by time or failure to meet spec.

    He was slightly embarrassed when 500 tonnes of perfectly packed potatoes arrived at the contract address!
     
    tonerei likes this.
  20. darrenyeats

    darrenyeats pfm Member

    100% I agree wealth distribution should be better, this is a major problem across the world. This is a valid concern and something to work on.

    It's worth pointing out a lot of the salary and bonus in FS is being taxed. Probably half of the bonuses end up in government coffers. Plus corporation tax. But yes, fixing tax loopholes would help a lot more.

    I keep coming back to the fact, despite managing capital flows from and to the rest of the globe, these are businesses and employees like any others. Bit like the casinos in Las Vegas: most profit is being made off of "other's" money dealings - it's mostly not about the residents of Las Vegas or their money dealings. (Again I agree, distributing profits and job opportunities fairly within Las Vegas is a valid concern.)
     

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