The Bank of England governor has slammed the world’s largest banks for threatening “the stability of the global financial system”, and called for a more sustainable industry.
Speaking at the G30 international banking seminar in Washington DC, Mark Carney said: “Operating in a heads I win, tails you lose, bubble, the world’s largest banks threatened the stability of the global financial system.
“Their bailout using public funds undermines market discipline and goes to the heart of fairness in our societies,” he said.
Mr Carney added that, as well as “tackling the rampant moral hazard of the financial system”, safeguards needed to be put in place to protect major banks from external shocks in the future.
The governor chairs the Financial Stability Board, an international group aiming to promote effective financial sector policies and regulation.
He said that in developing proposals to be presented to the G20 in Brisbane in November, it would reach “the watershed in ending too-big-to-fail”.
Adviser view
David Finan, chartered financial planner for Carlisle-based Jardine Finan, said: “The advisory world has been overegulated, whereas the banking system has been underregulated.”
