“Frederick Forsyth might look at this”

Eoin Treacy's view Thank you for this interesting graphic. More than a few people, not least Christian Noyer, have alluded to the size of the UK's financial sector debt as a reason the country should not have a AAA rating. However, apart from the fact that the UK has adopted a radical austerity program, has control of its own currency and a long history of making good on its liabilities, all financial debt does not equate with government debt.

London is one of the world's largest financial centres. Since finance is basically about cash flows and who owes what to whom, isn't it reasonable to expect that financial debts would be focused in a financial centre? The UK's banks certainly needed to be bailed out. However, the insurance, pension, commodity, fund management and other sectors did not.

There might be valid arguments for why the UK should be downgraded in future, such as anaemic economic growth and the Bank of England's clear inflationary bias, However, I suspect the size of the financial sector is unlikely to be one of them.