No, a large financial sector is an indicator of inefficiencies elsewhere. Else, there wouldn't be a reason to pay middlemen to solve said inefficiencies.
I think that assumes that the market is rational. Could it not be an indicator of increasing corruption instead?
A banker gets paid to allocate capital, manage risk, and so on, and gets to share in some profits as an incentive to make the correct decisions. Take the reward and allocate it towards bribing politicians to remove restrictions on banking, accumulate more money, spend more money on "lobbying" or "campaign contributions" (that is, more bribery). Lather, rinse and repeat for 3 decades or so, and suddenly you're not being paid a rational amount for improving market efficiency, you're just bleeding off money from the economy. Become "too big to fail", reap the rewards of risky investments that pay off, dump the cost of failed investments on the public purse, reinvest the money to skew regulations in your favour even more, profit.
In theory, although our large financial sector creates some of those inefficiencies and lobbies for others. It's rather like the mafia in that respect.
Fraud at the heart of high finance, unsustainable lending, de-regulation of gambling activities and ZIRP all contribute to said inefficiencies.
The financial sector does a lot more than play middle man (in fact arbitrage is so quickly found these days its a hard to make much money doing this anymore)
Primarily, they invest. Putting money into places that need capital and will likely grow.
