The regulatory agenda of the past 25 years has focused on de-risking, without realising that systemic risks were building in the system.

This regulatory ‘safetyism’ has hampered institutions’ ability to channel capital effectively into the real economy, resulting in low productivity and lacklustre economic growth.

Our analysis also underscores the challenge of answering the question – how much money is in the investment system – a vital starting point for policy makers – as knowing how much money is in the system is crucial for any government wanting to unlock the system’s potential for productive investment.

Coupled with this, a frequently overlooked point is that some of the existing stock of assets is “tied up” e.g., assets held to pay pensions via annuities. Consequently, the size of the stock of assets that is therefore available to be moved into productive investment, for example, is only a subset of the overall stock of assets in the system.

Read the full report: The Trillion-Pound Question