No amount of financial regulation can save the banking industry from itself if the people in it are fundamentally greedy and self-interested, Mark Carney told a room full of millionaires Tuesday.
Carney, the Canadian-born former head of the Bank of Canada who's now heading up the Bank of England, made the remarks at conference in London attended by money managers in charge of $30 trillion — a third of the investable money on the planet. His audience included former U.S. President Bill Clinton, IMF Chief Christine Lagarde and Prince Charles.
Carney is generally heralded for his stewardship of Canadian monetary policy in the lead-up to the global recession of 2008 and afterwards. His speech to the London audience on Tuesday was at once a recap of all the measures that financial regulators have taken ever since then to rein in the more egregious excesses of the financial world, but also a plea for bankers to recognize that ultimately the global economy is in their hands.
The global recession that began in 2008 was born out of a financial crisis that preceded it, which was itself caused by international banks suddenly realizing they were invested in murky, shoddy assets, and they didn't have enough actual capital to cover their sudden, mounting losses.
Although co-ordinated international efforts seem to have managed to bring the global economy back from the brink of collapse, there's a palpable sense among regular people that the financial industry hasn't learned from its mistakes — nor did it ever really pay for them.
Carney outlined a number of steps that international regulators have taken to beef up their oversight, including a cap on bonuses in several countries, demands to increase capital ratio reserves, and broad limitations on what types of businesses, exactly, banks are even allowed to meddle in.
But ultimately, those who work in the financial industry must know they are responsible for the damage that can be caused by any immoral or illegal actions.
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