Winnipeg Free Press - PRINT EDITION

Banks must restore public's trust: Carney

  • Print

TORONTO -- The outgoing head of Canada's central bank says economic recovery can only happen if banks can rebuild the public's trust.

"To move to a world that once again values the future, bankers need to see themselves as custodians of their institutions, improving them before they pass them along to their successors," said Bank of Canada governor Mark Carney during a panel discussion Friday at the Toronto Region Board of Trade.

Speaking in front of more than 200 business leaders, Carney said recovery from the 2008 financial crisis has been slow, mainly due to the "fundamental loss of trust" in the global banking system.

It was announced Thursday that Carney, who is leaving for the Bank of England at the end of the month, will be replaced by Export Development Canada chief executive Stephen Poloz.

The discussion Friday also featured Roger Martin, dean of the Rotman School of Management at the University of Toronto, and Convivium editor-in-chief Rev. Raymond De Souza.

Carney said the loss of trust has a real economic consequence.

"It is making the pace of the recovery much harder and the pain of the aftermath that much worse. The real economy relies on the financial system and the financial system itself relies on trust," he said.

The governor said in the years leading up to the financial collapse, the big banks lost their way when they became more about generating profits, rather than helping their clients -- the public.

"Banking is fundamentally about mediation. It's about connecting savers and borrowers in a real economy but the industry developed increasingly as an apex of economic activity as an end of itself," he said. '

"Banks became more about connecting with other banks than connecting with clients. Clients became counterparties and banking became transnational as opposed to relationship-based."

To get back to their "core values," Carney proposed governments need to strike a balance to ensure banks hold enough capital so they won't too vulnerable to failure, but still be open to penalties for misconduct.

Martin said it was the responsibility of business schools to teach those entering that financial sector they should not just strive for monetary rewards, which can lead to a unethical and "investor-first" industry.

-- The Canadian Press

Republished from the Winnipeg Free Press print edition May 4, 2013 B9

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Inside peek at Real Pirates, new Manitoba Museum exhibit

View more like this

Photo Store Gallery

  • Someone or thing is taking advantage of the inactivity at Kapyong Barracks,hundreds of Canada Geese-See Joe Bryksa’s goose a day for 30 days challenge- Day 15- May 22, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • Perfect Day- Paul Buteux walks  his dog Cassie Tuesday on the Sagimay Trail in Assiniboine Forest enjoying a almost perfect  fall day in Winnipeg- Standup photo – September 27, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Are you still on the Bombers' and Jets' bandwagons?

View Results

View Related Story

Ads by Google