Fifty years ago this newspaper said that British banks were "the world's most respectable declining industry" and asked: "Has banking a future?" With hindsight, that analysis was spectacularly off the mark. Far from shrinking, banking across the rich world expanded prodigiously between 1963 and the financial crisis in 2008. By almost any measure it generated remarkable returns for shareholders and paid vast sums to its employees. Returns on equity (roe), a standard measure of profitability, routinely ranged from 20% to 25% for the financial industry as a whole and often more for the most successful firms.
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