"The $100 Billion Question" by Andrew G Haldane, Executive Director Financial Stability, Bank of England, March 2010
The banking industry is also a pollutant. Systemic risk is a noxious by-product. Banking benefits those producing and consuming financial services – the private benefits for bank employees, depositors, borrowers and investors. But it also risks endangering innocent bystanders within the wider economy – the social costs to the general public from banking crises. Public policy has long-recognised the costs of systemic risk. They have been tackled through a combination of regulation and, at times, prohibition. Recently, a debate has begun on direct restrictions on some banking activities - in other words, prohibition. This is recognition of the social costs of systemic risk. Bankers are in uproar.