Mark Carney: Banking sector could double in size in 25 years

Mark Carney: "You really have to hold your nerve and keep the focus."

The governor of the Bank of England has said the banking sector could double in size but still needs tough regulation.

Mark Carney told the Guardian the financial sector could be worth 20 times the UK's economic output in 25 years.

He said: "If the UK financial system thrives in a post-Brexit world... it will be 15 to 20 times GDP in another quarter of century.

"Well then you really have to hold your nerve and keep the focus."

Carney was speaking to the Guardian to mark the 10th anniversary of the start of the global financial crisis in August 2007.

He said the UK could not return to the pre-crisis light-touch regulation in order to attract business after leaving the EU.

The governor has previously said the UK after Brexit could be the "investment banker for Europe".

"Chipped away"

He said: "We have a financial system that is [now] ten times the size of this economy… It brings many strengths, it brings a million jobs, it pays 11% of tax revenue, it is the biggest export industry by some token… all good things.

"But it's risky."

"We have a view… that post-Brexit the level of regulation will be at least as high as it currently is and that's a level that in many cases substantially exceeds international norms.

"The problem you have is that the same issues re-emerge under different labels… and the progress that's been made… is gradually chipped away."

Mr Carney's comments come as US regulators begin formal proceedings to loosen regulations brought in after the financial crisis to curb the way banks took high-risk bets on the financial markets.