Wealth management at risk from "underlying problem"

Companies in sectors such as corporate banking and wealth management still suffer the ’underlying problem’ of a savings disaster.

This is the opinion of Michael Baxter - editor of Investment and Business News - who said the key issue is not global debt, but firms and countries saving money and not spending it.

’It is just fuelling one bubble after another,’ he claimed.

Mr Baxter explained that in the past decade, house prices were driven up by such saving and that now the same effect is being had on government bonds.

He criticised the government for not having plans in place to assist wealth management by addressing the ’savings glut’.

The expert noted that when spending that is not debt-led is down, there will be a recession unless borrowing takes place.
Chancellor George Osborne last week announced the coalition’s proposals for reforming the financial sector, including corporate banking.

A Prudential Regulatory Authority will be set up as a Bank of England subsidiary, while the Financial Services Authority will be abolished.ADNFCR-2318-ID-19848265-ADNFCR