MPC dove warns against obsession with bank sector

BANK of England interest rate dove Adam Posen will warn the UK government at an Edinburgh conference this week that it should avoid becoming obsessed with growing Britain’s banking sector.

Posen, a member of the BoE’s monetary policy committee (MPC), will urge politicians not to offer “too much support” to the big lenders in a speech at the “Just Banking” conference – organised by academics, environmental campaigners and trades unions.

Posen told The Scotsman’s sister paper, Scotland on Sunday, at the weekend: “We must be cautious about the government giving too much support and encouragement to large banks.

“We, as a society, need to reconsider the cost-benefit balance of having global banks headquartered in our countries if those banks’ balance sheets become significantly bigger than our GDP.”

The economist added the UK having bank headquarters “exposes our taxpayers to risks which other global firms do not”.