Why Is The UK Banking System So big And Is That A Problem?

Though size can be important, it is the resilience of a banking system that is key for financial stability, notes a Bank of England report.

In a report co-authored by Oliver Bush of Bank of England titled: “Why is the UK banking system so big and is that a problem?”, the authors discuss whether banking system size is a robust leading indicator of a crisis.

UK Banks’ total assets constitute 450% of nominal GDP

The Bank of England report notes the UK banking system is large relative to most other major economies.  The report highlights three key features of the UK banking system.

First, the UK banking system is big. When compared to a sample of countries comprising the U.S., Japan and...