The banking executives at the heart of the 2008 financial crisis “got away without sanction” and that has to change, Bank of England Governor Mark Carney says.
Speaking in Washington recently, the former Bank of Canada Governor also added his voice to those who say the oil industry is in a “carbon bubble.”
Carney told a World Bank seminar that, if global temperature growth is to be limited to 2 degrees celsius, the “vast majority of [oil] reserves are unburnable,” according to The Guardian.
A growing number of experts say that if a global deal is reached on climate change, oil and gas companies will prove to be overvalued, causing the “carbon bubble” to burst.
Carney also defended new financial sector regulations in the U.K. that could make senior executives criminally liable if a bank fails.
Those bank executives who don’t want to abide by the new rules should resign, Carney said.
“One of the legacies of the crisis in the U.S. and by and large in the U.K. was that the individuals who ran the institutions got away. They got away with their compensation packages, they got away without sanction,” Carney said at the IMF’s annual meeting in Washington, as quoted at the Daily Telegraph.
“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.”
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The Canadian central banker dodged most photographers by taking the tube to work, arriving at Threadneedle Street shortly before 7am on July 1, 2013.
On July 8 2013, Carney expressed shock at the violent abuse suffered by female campaigners behind a campaign to have Jane Austen on the new £10 banknote, saying that it "should be prosecuted to the fullest extent of the law." Just days later, the Bank officially chose the author as the future star of the £10 note.
On July 17, it emerged that Carney used his first vote at the head of the Bank of England's Monetary Policy Committee to keep the bank's "quantitative easing" stimulus programme on hold, as well as interest rates at their record 0.5% low, something which has remained the case over his first year. He also kept things cool socially as he was seen at the Wilderness Festival in Oxfordshire.
On August 7th, Carney outlined that the Bank of England will not raise interest rates until unemployment falls below 7%.
The day after unveiling his forward guidance, Carney said banking culture needed a "fundamentally important" change. He later on soothed his tone and praised the City as a "national asset", but in May, resorted to lashing out at bankers for their "disturbing" greed.
Vince Cable lashed out on 24th of August at the Bank's "capital Taliban' for restricting banks' lending to small businesses. Carney later returned fire this June when he warned that the business secretary's ideal limit for mortgages risked ruining the recovery.
In January, Carney undermined Alex Salmond's plan that an independent Scotland would keep the pound sterling in a currency union, warning that such a model has "clear risks" and "requires some ceding of national sovereignty".
Carney admitted in November that he was "more than mildly offended" by a Labour MP suggesting that he was too close to George Osborne and presented an artificially "rosier picture" of the economic recovery. Labour MPs also weren't happy in January after Carney seemed to dismiss their proposals for the banking sector.
After dumping the 7% unemployment threshold in February as a market for when the Bank may raise interest rates, Carney kept to expectations that the Bank would only start to raise interest rates by spring of 2015, before suddenly in June suggesting that they could rise sooner - implying the end of this year. Just days later, he dropped the hawkish talk, with one MP saying he was like an 'unreliable boyfriend' in his signals.
Carney urged Osborne to consider appointing female economists to the Bank of England's then entirely male monetary policy committee, with the chancellor breaking his string of all-male appointments in March by picking Nemat Shafik as the next Bank deputy governor.
Amid rising concern about the UK's overheating property market, Carney switched off the Bank's mortgage lending support in November, and then later revealed plans in June to cool the mortgage market further - even though the Bank admitted they would have "minimal' impact.
Carney unveiled plastic banknotes as the future replacement for paper, with it confirmed in December that the Bank would start printing polymer notes, which it emerged could be cocaine-free.
Carney was responding to reports that two directors of the British division of HSBC threatened to quit over the new rules.
He said world leaders at a G20 conference in Australia next month would present a plan to end the phenomenon of “too big to fail” and prevent future taxpayer bailouts of banks.
G20 countries will agree to an increase in the minimum capital buffer limit for the world’s largest banks, Carney said. This means these banks would have to hold more assets or cash in reserve in case of a financial crisis.
At the World Bank meeting, Carney urged the world’s corporations to adopt “integrated reporting” — the practice of accounting not just for a company’s finances, but also its broader short- and long-term impact on all stakeholders.
Carney decried the “tragedy of horizons” -— the fact that businesses and investors often don’t look far enough to see the long-term impact of their actions, even if the impact is known, such as in the case of climate change.
“With the right information [for example, on how a company’s business interacts with environmental needs], all groups can express their view, and influence the allocation of capital and credit today,” Carney said, as quoted at Emerging Markets.