Carney urges bankers to adopt 'high ethical standards'

Mark Carney said financiers should be "custodians of their institutions"

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Bankers should see their job as a vocation and adopt higher ethical standards, the governor of the Bank of England has said.

Speaking at a conference on the future of capitalism, Mark Carney said financiers should be "custodians of their institutions".

He added that a "reductionist view of the human condition" had prevailed in the run-up to the financial crisis.

Mr Carney also emphasised the need to tackle growing global inequality.

The governor said board members and senior management at banks should clearly define the purpose of their organisation and promote "a culture of ethical business".

He said this would help to support their long-term prosperity.

"Financial capitalism is not an end in itself, but a means to promote investment, innovation, growth and prosperity," Mark Carney told an audience in London.

He added that the financial crisis had exacerbated the disconnect between bankers and the true purpose of their work.

Start Quote

In the run-up to the crisis, banking became about banks not businesses; transactions not relations; counterparties not clients”

End Quote Mark Carney Governor, Bank of England

"In the run-up to the crisis, banking became about banks not businesses; transactions not relations; counterparties not clients."

'Famous or fortunate'

Mr Carney said that in recent years, inequalities of outcomes in societies both "within and across generations had demonstrably increased".

Globalisation and technology were the two main factors driving this, he added, and this meant that "superstars", or those already doing well, were seeing their wealth increase.

"Now is the time to be famous or fortunate," he added.

He said individuals and firms having a "sense of their responsibilities for the broader system" could help to counteract this trend.

"Bankers need to see themselves as custodians of their institutions, improving them before passing them along to their successors," he added.

End 'too-big-to-fail'

Mr Carney said current financial reforms, including those aimed at ending the existence of "too-big-to-fail" firms"- banks whose collapse would cause such a big knock-on effect on the wider economy that governments had no choice but to rescue them - would help rebuild trust in the system.

"This is the year to complete that job," he said.

Recreating "fair and effective markets" after recent price-fixing scandals, as well as ongoing reforms to compensation schemes would also help, he said.

In the past, Mr Carney said, "the present was overvalued and the future heavily discounted".

The governor was speaking at the Conference on Inclusive Capitalism in London aimed at discussing practical ways to "renew the capitalist system".

Attendees include men and women who hold some $30 trillion (£17.8 trillion) of assets under management - around one third of the world's investable assets.

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