On July 1, 2013 Mark Carney, a Canadian Roman Catholic, was appointed Governor of the Bank of England. He is the first non–British Governor since the bank was established in 1694. He is also the chairman of the G20’s financial stability board.

According to a Bloomberg report dated November 20, 2009, Carney’s actions as the then Governor of the Bank of Canada are said to have played a major role in helping Canada avoid the worst impacts of the 2007-2008 financial crisis.

The British financial sector has been plagued by scandals. Malpractices include Libor rigging, money laundering, drugs andterrorist financing and, more recently, the Forex scandal. This is a global foreign exchange rate scandal in which at least 15 of the world’s largest trading banks have allegedly colluded to manipulate and rig the daily foreign exchange. The tremors of this ‘scandalous earthquake’ are still rippling around the globe.

On May 27, Carney was one of the speakers at a London conference called ‘Inclusive capitalism’. Although, ironically, the press was excluded from this event, reports flourished.

The next day, The Guardian trumpeted Carney’s warning that: “The scandals highlight a malaise in corners of finance that must be remedied... Capitalism is at risk of destroying itself unless bankers realise they have an obligation to create a fairer society.”

Although Carney acknowledged that British and international policymakers and regulators have been trying, through several reforms, to come up with a fairer system and to limit the likelihood of a future financial crisis, for him this was not enough.

Carney, who was acclaimed by the Financial Times of March 10, 2009 as one of the 50 people who will shape the future of capitalism, has very clear, albeit radical ideas. At the London conference, he articulated that: “Consideration should be given to developing principles of fair markets, codes of conduct for specific markets and even regulatory obligations within this framework. There should be clear consequences including professional ostracism for failing to meet these standards.”

Trust in financiers is still at a crisis because, once shattered, trust is difficult to restore. Some top executives of bailed-out banks are still cashing in astronomical sums of money while taxpayers had to foot huge bailout bills. Concurrently, in some of these British banks, other employees were getting no bonuses at all and, even worse, thousands are being laid off.

Scandals involving amoral compensation packages/work practices have shattered public trust. Trust is not gained but earned. Some try to justify the millions of euros handed out annually to individuals by comparing these high-flying bankers to famous film stars and footballers. The city needs their talent, they say. But, according to Carney, “the present was overvalued and the future heavily discounted”.

Carney insisted that banks around the globe should utilise their profit to boost capital instead of paying extravagant sums of money to the selected few.

Sometimes, bank profits materialise by government support and, in some cases, through reduced competition. Even financiers need to mind and narrow the income inequality gap.

And Carney is not a solitary voice in this wilderness.

On May 28, 2014, The Tablet reported that the managing director of the International Monetary Fund, Christine Lagarde, when speaking in the same conference, quoted Pope Francis, when he proclaimed that the growing inequality gap between the rich and the poor is the “root of social evil”. According to this report, Lagarde said:

Once shattered, trust is difficult to restore

“The principles of solidarity and reciprocity that bind societies together are more likely to erode in excessively unequal societies.”

Incidentally, such terms, including also subsidiarity, are common in Catholic social teaching.

Lagarde affirmed that: “History also teaches us that democracy begins to fray at the edges once political battles separate the haves against the have-nots.”

“Lagarde and Carney let fire on the financial sector” declared the online version of the Financial Times on May 27.

At the this conference, Lagarde, who has a doctorate from Belgium’s Catholic University of Leuven, was in tandem with Carney when he asserted that “business needed to be seen as a vocation, an activity with high ethical standards and responsibilities”.

“Inclusive capitalism,” he concluded, “was a system where individual virtue and collective prosperity can flourish.”

Carney and Lagarde have no place for complacency and they seem determined to accelerate the pace for reforms.

Tony Micallef is a retired banker and former broadcaster.

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