Lagarde and Carney let fire at financial sector

From the IMF down, stark warnings of No Progress.

The Bankers will NOT change unless forced by hard regulation.


Financial Times
By Sarah O’Connor,
Emily Cadman
and Sharlene Goff
27 May 2014

Christine Lagarde, the managing director of the International Monetary Fund, has warned that “a fierce industry pushback” by the financial sector is delaying much-needed reforms and risks destabilising the global economy.

Speaking at a London conference on inclusive capitalism, Ms Lagarde said progress on building a safer financial system had been “too slow”, primarily because of industry attempts to halt the introduction of tougher new rules.

She also hit out at continued misconduct in financial services and said the industry had “not changed fundamentally in a number of dimensions since the crisis”, reeling off a list of scandals including money laundering and the manipulation of benchmarks such as Libor.

“Some prominent firms have even been mired in scandals that violate the most basic ethical norms,” said Ms Lagarde.

“While some changes in behaviour are taking place, these are not deep or broad enough. The industry still prizes short-term profit over long-term prudence, today’s bonus over tomorrow’s relationship.”

Her comments were echoed by Mark Carney, the Bank of England governor, who warned that “unbridled faith in financial markets” before the crisis, rising inequality and recent “demonstrations of corruption” had damaged the “social fabric”.

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