London has been one of the world's main international financial centers since the arrival of the Euromarkets in the 60s. With over 500 banks there, London is a leading international center for banking, insurance, Eurobonds, foreign exchange trading, and commodity trading. According to the Bank for International Settlements, financial services now account for almost 10% of the UK's GDP.
Of course, while having a prosperous banking industry is very beneficial to the UK economy, its size can be a threat to the economy should the industry be mismanaged. The recession that began in 2007 showed that the banking industry was indeed mismanaged in the years leading up to the recession. This mismanagement saw banks such as Northern Rock and the Royal Bank of Scotland, as well as building societies, being taken into public ownership to prevent their demise.
After the general election in 2010, it became clear to the UK's coalition government that, if the "City" in London was to maintain public confidence, the regulation of the industry needed an overhaul.
