International Economic Essay

London financial market has growth one of important position in the global financial market. This benefit caused by perfect financial system and effective financial regulation before. Especially, there is the financial power house generate huge economic activity in London. It benefit of financial sector can generate huge positive impact in different aspects, such as Huge taxes to the government, huge percentage of GDP, attractive enormous FDI and Massive employment work in this sector. However, the financial sector could lead to different cost that the UK authorities will help the banking system to keep health, when occurs a collapse in financial sector. For this reason, this will generate huge cost and affect economic in UK. Moreover, the financial sector still remained an area of tension between UK and EU members since UK joint the EU. The main characteristic of UK banking system is that the UK are not willing to joint the Euro zone due to losing control of the determinant in economic. As a result, UK is one of country less influence in European debt crisis. First, this paper attempts to analysis the how to keep the stability financial sector to economy in the UK. Second, this essay is going to evaluate the main cost and benefic of the financial sector in the UK. Third, the essay will evaluate the current regulation in financial sector between UK and EU.

There is hot topic about how to keep the financial stability in the world. The financial stability will be carried out in the comprehensive way involving administrative, legal and economic means. Schinasi (2006) indicated that stability required the central bank, financial department and financial regulators to take different policies to influence the financial institution, financial market and economic operation. This shows that only central bank and government fiscal power cannot be able to achieve the goal of financial stability effectively. Therefore, the financial sector should build the stability