Do we really need a banking system that has assets is over four times GDP?
I have no idea what the average interest charge is on the total assets of the UK banking system. However, lets take a guess and say that it is 5 percent. If it is, and I doubt that it is any lower than that, then each year, debtors pay banks over 20 percent of GDP as interest. That is a shockingly large number, especially when you consider that the government takes around 37 percent of GDP as taxes.
I know I am mixing up my national accounts. Obviously, you can't add the two numbers together. Nevertheless, the comparison does capture a deeper truth about the UK economy. It comprises of little more than money lenders and tax inspectors.
Most banking lending finances consumption not investment. Likewise, taxation mostly goes on benefits. Neither are terribly productive.
As such, the UK has a strong smell of unsustainability about it. The contradictions built up over ten years of financial mismanagement are coming undone. It seems so unreal and incredible, and nothing symbolizes this dreadful state of affairs like our bloated banking system.
Four hundred percent of GDP? It can not be; it should not be.