In the March 2017 Taxcast: the high price we’re paying for our finance sectors – we look at staggering statistics showing how the US finance sector is a net drag on their economy. Also, as the British government initiates Brexit divorce negotiations to leave the EU, we discuss something they ought to know, but obviously don’t – they’re actually in a very weak position. Could it mean the beginning of the end of the finance curse gripping the UK economy?
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The finance curse identifies a paradox at the heart of financial sectors. While it is common to think of a finance centre as the engine of an economy, an oversized financial centre can make a country poorer and destabilise economies, and actually delivers a range of harms. For instance, oversized finance boosts inequality, undermines democracy and people’s faith in the rule of law. It damages national security. It corrupts markets, makes businesses more fragile, less resistant to shocks, and harms good governance. It also has powerful geographical, racial and gender effects.