Bank of England governor Mark Carney’s speech shows there’s more to the City than past mistakes
It is perhaps a mark of how far we’ve come since 2008 that the governor of the Bank of England can suggest that the time has come for people to start showing bankers a little respect.
Mark Carney may have ruled out “hugging a banker” (in the way that David Cameron might have hugged a husky, or a hoodie) but he used his speech at the Bank’s Open Forum yesterday to recognise that while things may not be perfect, the financial services industry has come a long way since the crash.
Today, more people are employed in the industry than ever before. But it isn’t business as usual. In London, the number of investment bankers has fallen while the number of compliance and risk roles has increased.
New regulations aimed at ending “too big to fail” are on the cards at the upcoming G20 and new rules around individual responsibility have been introduced.
A new tax environment combined with regulatory reform means that nobody’s quite playing by the old rules anymore. And rightly so.
As the chancellor George Osborne used the same forum to remind us of tough new rules on criminal accountability, the governor stressed that the financial services industry contains “a lot of talent… a lot of integrity” and “a lot of people doing the right thing”.
It was refreshing to hear him bang the drum for this vital part of the country’s economy. Over two million people are employed in the financial sector and associated professions across the UK, the majority outside of London, and it accounts for eight per cent of GDP.
In addition, the amount of tax (£66bn last year) and philanthropic contributions coming from this sector, and from the City, are testament in their own right to the economic, cultural and social benefits of a thriving financial services industry.
It’s something of which the country can be quietly proud, and it was celebrated last night at a Mansion House dinner hosted by TheCityUK, at which business secretary Sajid Javid, himself a former banker, said that he would always stand up for the City.
The governor thinks that the British public might start respecting bankers again. This respect might well be grudging, but it would not be misplaced.