Good Brexit piece from Eric Reguly in the Globe on Saturday. We must acknowledge that what has been incredibly enriching for the bankers the past 15 years has been incredibly devastating for the real economy. This reality is repeatedly ignored in the finance-sponsored media coverage aimed at scaring Britain out of its ‘Leave’ vote, and the rest of the world from implementing desperately needed financial reforms. See: If Brexit costs a few city bankers their jobs, is that so bad?
“The economies of London and Britain are way too heavily skewed towards the City and we know that creating one-product wonders, as Alberta has done with oil, is never a good idea. According to the City of London Corporation, the British financial service sector is responsible for almost 10 per cent of national output, the highest among the Group of Seven countries, with associated professional services contributing another 5 per cent or so.
The 2008 financial crisis revealed that Britain’s banks were time bombs disguised as glass and steel skyscrapers. The government of then-prime minister Gordon Brown had to nationalize half the banking industry to prevent wholesale financial and economic collapse. In spite of the new safeguards, such as dramatically toughened up bank capital requirements, it could happen again…
In spite of the City’s success, or because of it, the average Briton probably wouldn’t care, or might even welcome, the loss of a good chunk of the 500,000 City jobs. The flood of bankers and their outlandish incomes have jacked up house prices to absurd levels, making great swathes of London unaffordable to the middle class. Prices for everything from taxis to restaurants are painfully high.
Losing 10 per cent of those jobs would take some hot air out of the London housing bubble, giving the unrich the opportunity to buy houses. The City’s loss would be Britain’s gain.”