Free information index
Bankers caused crash and got away with it, says Carney:
Bank of England chief says
bosses should have paid a higher price
By MAIL FOREIGN SERVICE
PUBLISHED: 02:34, 13 October 2014 | UPDATED: 10:51, 13 October 2014
The Governor of the Bank of England last night launched a stinging attack on the bankers who caused the financial crisis and ‘got away without sanction’.
Mark Carney said the bosses of the banks behind the 2008 global financial crash should have paid a higher price for their errors.
Instead – despite facing limited social embarrassment – they were still on the ‘best golf courses’.
Speaking in Washington, Mr Carney said: ‘The individuals who ran the institutions got away with it. They got away with their compensation packages and without sanction.
‘Maybe they are no longer at the most esteemed table in society, but they are still on the best golf courses and that has got to change.’
During a panel discussion on financial ethics, Mr Carney made it clear he had no sympathy for board-level bankers who would not take personal responsibility for the actions of their organisations.
The Bank governor, who has been in Washington for a series of International Monetary Fund meetings, complained that the authorities had been unable to jail any of the bankers whose failings led to the global financial crisis.
His rebuke came as two senior executives of HSBC are poised to quit their jobs over new tough rules that would see ‘reckless’ financial executives facing jail for their actions or omissions in the event of a major failing by their bank.
But Mr Carney said such rules were necessary because the heads of banks during the crisis had got away with huge amounts of money without criminal sanction.
He made it clear he rejected the complaints of the HSBC board members without naming the pair or specifically referring to their bank.
While it was difficult to come up with acceptable compensation schemes and incentives, he said one thing that was vital to make the system safer was clearer personal responsibility. Curtailing financial rewards alone was not enough.
He said: ‘If you are the chairman or the head of the risk committee, you have a responsibility for the activities of that institution.
‘If you don’t think you can do it, you shouldn’t be on the board.’
The new regulation regime of senior managers is designed to make it easier to bring criminal charges in a future banking crisis. Mr Carney added: ‘It does focus the mind of directors and it should. I would like to think that the minds of directors are being focused. Some of them might not like it – that’s okay.’
It emerged last week that two HSBC executives are preparing to leave the bank amid concerns over the potential personal and criminal responsibility they would face in future.
Alan Thomson, who sits on the audit and risk committees of HSBC, has resigned and will leave the board of the bank’s UK subsidiary in January. John Trueman, its deputy chairman, is also preparing to resign.
Mr Carney has always taken a tough stance on personal responsibility and has a history of standing firm in the face of complaints from financial sector employees.
Meanwhile, the taxman has ramped up prosecutions against individuals suspected of tax dodging – but is still accused of letting corporate giants off the hook.
The number of court cases HMRC brought for illegal tax evasion rose last year by almost a third – from 612 to 795 – data from Thomson Reuters shows today.
It is not yet known how many were successful.
But it is claimed the taxman has done deals with Google that allow it to avoid paying millions in the UK.