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UK bank sector set to shrink

The UK banking sector will have to become smaller after the financial crisis because banks will be forced to hold more capital and safer assets according to the Bank of England’s monetary policy committee.

MPC external member David Miles said a smaller banking system would mean the economy would grow more slowly in the short-term, in a speech yesterday according to the Financial Times.

Miles said this would lead to lower savings, lower investment, lower house prices and less home ownership.

He said it would also force the Bank of England to set lower interest rates to compensate for the higher cost of funding that banks would face.

But Miles said that in the long run economic growth would be higher because a smaller banking system would reduce volatility.


Out of context

“This was a good Budget for bingo and boilers.”


New buyer may sell off James Hay wrap

IPS Partnership owner IFG Group could sell the James Hay wrap after it takes over the firm in February in a deal worth £35m. The Sipp specialist revealed last week that it is set to buy the firm from Santander. IFG is proposing to raise £45.3m from shareholders. IPS, which has 8,000 Sipp clients and […]

The FCA’s five fixes for retirement information

The Financial Conduct Authority (FCA) has started to change the way that people will be told about their pension options. In a recent market study paper, they lay out their final proposals on the information that should be delivered to people approaching retirement and how it should look and feel. During 2015, there will be […]


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