Today I read:

One of Britain’s chief exports is Banking Services.

Now I presume that doesn’t mean consumer savings accounts.

I presume it means investment loans to companies and equities holdings in foreign companies. (Some might argue these are similar)

But if a bank has holdings in a foreign company, is it really exporting Banking Services? Isn’t that just owning things?

My question is: What is the concrete meaning of Britain saying they export Banking Services?


Exports of banking services means that banks in the UK charge companies and people abroad for banking services, which might include for money transfer, foreign exchange and other broking, wealth and asset management, merger and acquisition services, and other things that banks do. It may include their interest rate margins between taking deposits and making loans, as an implicit fee for financial intermediation

It does not include actual foreign investment, such as direct investment, portfolio investment or financial investment: those do not count as exports of services in the Balance of Payments though income from them do count as primary income in the Balance of Payments current account

Nor does it take into account that many of the banks in London are in fact predominately foreign owned or that many of their staff are foreign. If they operate from London then they are treated as British banks for these purposes, though their profits may then count as an outward flow to their owners in the Balance of Payments

In 2017 UK exports of financial services (excluding insurance and pension services) were worth about £61 billion; imports of financial services were almost £11 billion


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