BOE chief economist Andy Haldane on the role of finance
in society
Haldane notes:
“Let me start by
discussing why closing the trust deficit in finance matters to the economy and
to society. Whisper it quietly, but a large and well-functioning financial
sector is an essential foundation for a growing and well-functioning economy.
That is not an ideological assertion from the financial elite; it is an
empirical fact. Most of the time and in most countries, finance is a growth-booster
not a growth killer.
The economic
textbooks do not get everything right, but on this they are clear and
compelling. Banks and capital markets help finance investment by companies. And
that, we know, is the seed-corn of future growth. They also help insure against risk by
companies and households. And that, we know, is the seed-corn of stability. In a nutshell that is why, over long periods
of time and across wide ranges of countries, well-functioning finance has
supported wealth-creation and well-being.”