The notion that the City needs to shrink is gathering momentum

MEASURES of the attractiveness of global financial centres, rough and ready as they are, are consistent: only New York can vie with London for the title of top dog. Financial firms from around the world are drawn to the British capital; the assets in the country’s financial system are ten times its GDP. Yet little of the Square Mile’s bountiful wealth seems to trickle out. The gap between Britain’s richest and poorest parts is perhaps the biggest in Europe. Britain’s productivity growth is woeful.

Many Britons suspect that the City succeeds at everyone else’s expense. That view is decades old, but the financial crisis of 2007-08 intensified it greatly. The crisis brought the economy to its knees; the state spent £140bn ($220bn) bailing out banks. Public services have been squeezed in the years since; living standards have stagnated. Yet bankers still earn royal ransoms. As Britain prepares to fall out of the European Union’s single market after Brexit—thereby weakening the City’s appeal—some...



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