George Osborne: Too soon to forgive UK bankers for failures and scandals

Bankers hoping to move on from the financial failures and scandals of 2008 and afterwards got little succour from Britain’s top two financial officials yesterday, who told them the time was not right.

It is “totally understandable” that the public is still angry about bailing out banks in 2008 and not enough time has passed for the more stringent banking regulation to be relaxed, British finance minister George Osborne said at a conference.

Bank of England Governor Mark Carney said much the same in a television interview.

“Neither I nor my successors will be ‘hugging a banker’. Ultimately we want to get to a point where people can respect bankers,” he said.

Mr Osborne and Mr Carney were both attending a BoE conference examining whether enough has been done to rein in reckless behaviour by banks that have been fined millions of pounds for trying to rig the Libor interest rate benchmark and currency markets.

“The idea that just a couple of years on you can go ‘you can forget about all of that’ and move on, is, I think, a bit optimistic. It is going to take time,” Mr Osborne said.

Banks still have to earn our trust, says Osborne https://t.co/iEdn2yDvWM

— Times Politics (@timespolitics1) November 11, 2015

He added that traders should look at the big fines levied on the banks for misconduct and ask themselves whether the “extra buck on the trading floor” was worth it.

Speaking at the conference, Mr Carney said a welter of new rules have made banks more resilient to shocks and unlikely to need a taxpayer bailout again in future.

But he sought to answer criticism from banks that new rules were rushed through, creating unnecessary complexity that is making lending to companies too burdensome.

“Given the complexity and scale of financial reform, it would be remarkable if every measure were perfectly constructed. Or if they all fit seamlessly into a totally coherent, self reinforcing whole,” Mr Carney said.

“Authorities must have the courage to listen, the honesty to admit our mistakes and the confidence to set them right,” he said.

Governments and regulators are keen for the banking sector to move on from the crisis and turn their focus away from replenishing capital to helping the economy grow.

Mr Osborne wants Britain to become the top global centre for financial technology and said he was making sure regulators are provided space for this and digital currencies to innovate.

Earlier yesterday the chairman of Barclays, who heads an industry lobby group, said a new tax on banks posed a long-term threat to Britain’s attractiveness to the financial sector.

However, Mr Osborne said Britain still faced the dilemma of how to grow a vibrant financial services sector while ensuring that taxpayers were off the hook.