RBGPF | -1.52% | 73.88 | $ | |
NGG | -0.11% | 72.15 | $ | |
CMSC | 0.24% | 22.485 | $ | |
RYCEF | -0.3% | 13.2 | $ | |
SCU | 0% | 12.72 | $ | |
BP | 0.22% | 32.2 | $ | |
SCS | 0.66% | 10.58 | $ | |
RELX | -1.86% | 52.73 | $ | |
VOD | -0.79% | 11.43 | $ | |
BCC | 1.94% | 88.14 | $ | |
JRI | -0.46% | 13.09 | $ | |
CMSD | 0.17% | 22.89 | $ | |
GSK | -0.68% | 37.97 | $ | |
BTI | -0.71% | 52.25 | $ | |
RIO | -1.16% | 63.1 | $ | |
AZN | -1.4% | 72.66 | $ | |
BCE | -0.95% | 24.2 | $ |
Finance’s Role in Economic Ruin
The finance industry, often hailed as the backbone of modern economies, has a darker side that increasingly threatens global stability. Since the 2008 financial crisis, triggered by reckless speculation in mortgage-backed securities, the sector’s unchecked growth has sown seeds of destruction. In the United States alone, the financial sector’s share of GDP rose from 2.8% in 1950 to 8.4% by 2020, yet it produced no tangible goods, instead profiting from debt and risk. Critics argue this shift diverts capital from productive industries like manufacturing—down from 27% to 11% of US GDP over the same period to speculative bubbles.
The 2023 collapse of Silicon Valley Bank, fuelled by over-leveraged bets on tech stocks, cost $20 billion in bailouts and sparked a domino effect across European markets. In the UK, the 2022 mini-budget crisis, exacerbated by hedge fund short-selling of gilts, pushed borrowing costs to record highs. Economist Ann Pettifor warns, “Finance thrives on instability it creates”. With global debt at $305 trillion—three times world GDP—experts fear the industry’s pursuit of profit through complex derivatives and high-frequency trading could precipitate another crash. Is finance an engine of growth or a wrecking ball?

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