Our banks too big for our own good
Research by the Bank for International Settlements suggests the dominance of Australia's finance industry – one of the largest in the world relative to the size of its economy – is a source of future vulnerability.
Stephen Cecchetti, chief economist of the BIS said: “Experience shows that a growing financial system is great for a while – until it isn't,” he told the BIS annual conference in Switzerland.
BIS research shows the finance sector starts subtracting from growth when it accounts for more than 6.5 per cent of value added and more than 3.2 per cent of employment.
In Australia, the finance sector accounts for 11.5 per cent of all industry value added. Australia's finance sector employs 3.7 per cent of the workforce.
Source: The Australian