Carney Threatens Bankers’ Golf Club Membership
Mark Carney is the first Canadian to be governor of the Bank of England and seems to be a very astute individual. The fact that many senior financial figures were responsible for the practices which ultimately led to the sub-prime debacle and the ensuing Global Financial Crisis have not suffered any personal repercussions has not escaped his hawk-like attention.
Speaking at the International Monetary Fund’s annual meeting, held in Washington recently, Mr Carney noted that many a top executive had "got away without sanction". He went on to note that these pariahs had perhaps suffered social opprobrium, but that further sanctions were still needed: "Maybe they were not at the best tables in society after that, but they're still at the best golf courses. That has to change."
Probably Mr Carney was not actually suggesting that these leaders of global finance should be banished to public golf courses after all. He was referring to plans to hold financial leaders accountable for “reckless misconduct” which could potentially entail a jail term, in the UK. Moves are also in hand to require banks to ensure that retail deposits (the public’s current and deposit accounts) are kept apart from funds in the banks’ investment arms from 2019 – banks in the UK have until the end of 2014 to outline how they will achieve this.
The governor of the Bank of England had little sympathy with members of the (UK) financial profession unhappy with the new, personal, accountability measures: "If you're chair of an audit committee, you have responsibility for the activities of an institution. And if you don't think you can discharge that responsibility, you shouldn't be on that board." His comments echoed an earlier speech in which he noted: "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. This cannot be allowed to continue."
Banking accountability and protecting the public purse from having to bailout cavalier financial houses and banks in the future, will be discussed further in next month’s G20 summit which will take place in Brisbane, Australia.