Andrew Haldane Raises Questions About How We Measure Value Added By Banks

This article analyzes the value added by the financial sector and concludes that much of its value added is for bearing risk. Unlike, managing risk which does add value by allocating capital to its most productive uses, bearing risk only adds leverage and increases bank profits. The risk of too to big to fail banks is born by the taxpayer. Bankers have been subsidized by the taxpayer and banker compensation is nothing more than rent seeking behavior.