BANKS need an infusion of capitalism as well as a focus on core values to rebuild their image in the eyes of society, Mark Carney said yesterday evening.
The perception banks were too big to fail – or seen as too big to fail by regulators and governments – has dealt a “fatal blow to public trust” in the financial sector, the incoming Bank of England governor said in a speech in London, Ontario.
He recommended “enhancing the role of the market” to end “heads-I-win-tails-you-lose finance.”
But along with extra market discipline, banks needed to focus on their core values – with better incentive packages focused on long-term returns, and by considering their responsibilities to society, not just their own bottom line, he said.
These reforms are needed to stop public distrust of finance leading to anti-market attitudes, Carney said. “[Skepticism about the benefits of finance] could undermine support for free trade and open markets,” Carney warned.
Carney also appeared to rebuke former Barclays boss Bob Diamond by saying the time for banks’ remorse was far from over.