Carney’s standing up for financial services
The era of banker bashing seems to be coming to an end after the Bank of England governor, Mark Carney, struck a decidedly softer tone towards financial institutions in a major speech to leading City figureheads.
In what’s being hailed by many commentators in the press as a ‘dramatic u-turn’ for the BoE, Carney said that he would be happy to see Britain develop an even bigger banking and financial services sector over the coming decades.
He said: “By 2050, UK banks’ assets could exceed nine times GDP, and that is to say nothing of the potentially rapid growth of foreign banking and shadow banking based in London, if London keeps its share of global banking.
“Some would react to this prospect with horror. They would prefer that the UK financial services industry be slimmed down if not shut down.
“In the aftermath of the crisis, such sentiments have gone largely unchallenged.”
“But, if organised properly, a vibrant financial sector brings substantial benefits.”
Well said, Mr Carney!
At the Financial Times-run event, he also announced an easing of rules for banks in need of short-term cash and hinted that support for other non-bank financial institutions could also be on their way.
He summed up the measures and his new stance by telling the audience: “Five simple words describe our approach: we are open for business.”
Carney denies that he is “cheerleading” for the banks – but, in my opinion, we should all be “cheerleading” for Carney.
His sensible, forward thinking, pro-business approach is a clear shift away from that of his predecessor, SirMervyn King, who often showed a kind of strange antipathy towards the financial sector.
At last the central bank is, seemingly, once again actively and publicly appreciating the true value of the industry. And this should be applauded; it should be universally praised.
I’m not saying that all Carney’s policies are flawless – indeed many could and should be reconsidered in my opinion – but there’s a real sense that there’s a fundamental and very welcome change in direction that is taking place.
A tough yet fair, ‘open for business’ policy, like other major worldwide financial centres have enjoyed for years, can only be a good thing for Britain and its (vital) financial services sector.
Nigel Green deVere Group