Britain’s financial system is “extremely” vulnerable to future crisis under current regulations, a new report warns. The New Economics Foundation (NEF) says the UK’s banking industry is the least resilient of all G7 nations.
The report warns the resilience of Britain’s financial system has only slightly improved since the 2008 crisis.
The NEF calls for sweeping changes to the UK’s banking sector, including the introduction of more competition, separating retail banks from investment banks and encouraging peer-to-peer lending.
Britain lags far behind all other members of the G7 group of major advanced economies in terms of financial resilience, the report found.
NEF ranked Germany as the group’s most financially resilient, followed by Japan, France, Italy, Canada, the USA and the UK.
Germany was given a resilience rating of 73 out of 100, while the UK scored 27. The US was the next worst ranked country, scoring 56 out of 100.
The study defines financial resilience as “the capacity of the financial system to adapt in response to both short-term shocks and long-term changes in economic, social and ecological conditions while continuing to fulfil its functions in serving the real economy.”