THE Governor of the Bank of England has said the UK's financial sector can be a national asset but that he is an enemy of taxpayer bailouts and financial instability.
Noting the financial services industry has come under sustained criticism in recent years, Mark Carney said banks and the like made a huge contribution to the UK economy. "Today, financial services account for a 10th of UK GDP and are the source of over one million jobs. Two-thirds of those are outside London, including jobs in asset management in Edinburgh," he said.
The Canadian banker said the financial sector could be "both a global good and a national asset".
However, insisting banks and the like need to ensure they are resilient, Mr Carney made it clear he wanted to see no chance of a repeat of the problems that engulfed the sector in 2008, when Royal Bank of Scotland was left requiring massive bailouts from the Government.
"The Bank of England today is the friend of resilient banks, continuous markets and good collateral; and we are the enemy of taxpayer bailouts, fragile markets and financial instability," he told an event in London.
He added: "Fairness demands the end of a system that privatises gains but socialises losses. And simple economics dictates that the UK state cannot stand behind a banking system that is already many times the size of the economy."
Mr Carney indicated he believed good progress has been made towards ensuring all big lenders' finances are secured on a stable footing.
"In the UK, all major banks and building societies now have in place credible plans to achieve the Bank of England's thresholds for capital and leverage," he said.
But Mr Carney said international regulators still needed to agree how to solve the problem of banks that are "too big to fail".
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