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Notes
5. See e.g. Pursuit of ‘competitive’ regulation makes unwelcome return in UK (https://www.ft.com/content/96517774-a6cc-4e30-a1a4-b82f612c1df3), Helen Thomas, Financial Times, Nov 12, 2021.
10. Cecchetti, S. G., & Kharroubi, E. (2012), Reassessing the impact of finance on growth. BIS Working Paper, no. 381; Cecchetti, S. G., & Kharroubi, E. (2018), Why does credit growth crowd out real economic growth?. NBER Working Paper 25079, Sept 2018; Arcand, J. L., Berkes, E., & Panizza, U, Too Much Finance? IMF Working Paper WP 12/161. (2012); Arcand, J. L., Berkes, E., & Panizza, U, Too much finance? Journal of Economic Growth, 20(2), 105–148 (2015).
12. For instance, Beck et al. (Journal of Financial Stability 10:50–64, 2014) criticise the “Too Much Finance” literature and find that finance benefits growth, whereas Sturn & Zwickl (2016) (https://link.springer.com/article/10.1007/s00181-015-0979-y) in turn find that Beck’s research “depend on outliers and are not robust against alternative specifications or estimation approaches … . Beck et al.’s criticism of the “Too Much Finance” literature is grounded on thin empirical evidence.” See also Sturn & Epstein, 2021 (https://www.sciencedirect.com/science/article/abs/pii/S0264999320312931?via%3Dihub), looking at methodological problems in how the finance-growth nexus is typically studied. They conclude: “Too much finance is robustly found to harm growth.”
16. “Competitiveness” is not effectively defined in the FRF, or in the Treasury’s related 2021 document “A New Chapter for Financial Services. (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/998102/CCS0521556086-001_Mansion_House_Strategy_Document_FINAL.pdf)” Elsewhere, however, Rishi Sunak in March 2021 explained (https://www.bankofengland.co.uk/-/media/boe/files/letter/2021/march/fpc-remit-and-recommendations-letter-2021.pdf?la=en%26hash=3C5B23BE764387498155F61CAF255417E665CCE8) it as a need for the UK to be “an attractive domicile for internationally active financial institutions, and that London retains its position as the leading international financial centre.” The Financial Services Act 2021 says (https://www.legislation.gov.uk/ukpga/2021/22/schedule/2/enacted) that the FCA must have regard to “the relative standing of the United Kingdom as a place for internationally active investment firms to be based or to carry on activities.”
18. John Glen − 2022 Speech to TheCityUK Annual Dinner (https://www.ukpol.co.uk/john-glen-2022-speech-to-thecityuk-annual-dinner/), Feb 12, 2022. “We have taken a balanced approach and chosen to introduce this new objective as secondary. This provides clarity – you might say a clear hierarchy – when there may be a tension between regulators’ various objectives.”