Size of financial sector Essay Example | Topics and Well Written Essays - 2000 words

Size of financial sector - Essay Example Moreover, profitability across all the financial sectors has improved except the insurance sector and it is anticipated to remain strong in the first quarter of the year 2015. Unfortunately, for the insurance and the building society the forecast suggests otherwise. The number of employment in the banking and insurance sector has decreased in comparison to other sectors while the training expenditure has risen. Department, I. M. F. M. C. M. (2014) suggests that this is a clear indication of the existence of shortage of skills and talents in the financial labor market. The financial sector has enormously grown over the last decades. Gloria (2015) illustrates that the parameters that measure these growths are: quantity of the financial market; the share of the GDP; wages; and employment. For instance, the economy of the UK has grown faster since the financial crisis of 2007/2008. It expanded by approximately by 1.9% in 2013. The growth is also attributed to the securitization in the financial market; intermediation of credit; and the subsectors of finance in the financial sector. On the other hand, the insurance sector has been steadily growing (at a steady pace). In addition, the growth is also evident in the increase in the financial claims and contracts such as bonds, stock, fund shares, and derivatives. Before the 200/2008 financial crisis, central banks use a simple modality that would effectively maintain and stabilize the inflation rate. However, in 2009 the interest rates were slashed to a level close to zero (zero lower bound). Jeucken’s (2001) notion indicates that below this benchmark would hav e been practical but wouldn’t have achieved the desired results. Central bank faced an uphill task of dealing with the increasing rate of unemployment as well as the collapse in the output. At some instances central banks have adopted the unconventional