Carney thinks trust in banks is extremely low
It will take a generation before banks are trusted once again by the British public as fines and scandals continue to hit the sector.
In a speech, Mr Carney said: “A series of scandals ranging from miss-selling to manipulation have undermined trust in banking, the financial system and, to some degree, markets themselves.”
Global banks’ misconduct costs have now reached over $320billion
The comments follow a turbulent week for Carney as his Deputy Governor, Charlotte Hogg, resigned after a conflict of interests and he warned against "overreacting" after UK inflation surged to its highest level in more than three years.
He added: “The economic consequences have been enormous. Global banks’ misconduct costs have now reached over $320billion (£256billion).”
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He believes the “crisis of legitimacy” means just 20 per cent of the British public think banks are well run, compared with 90 per cent in the late Nineties.
This “ought to be of grave concern”.
Antonio Simoes, the HSBC chief, said: “I think the public trust in us might take a generation to re-establish itself.”
Banks have been keen to change their image since the financial crash and convince the public to trust them while adapting to an ever increasingly digital economy.
Households are set to feel budgets squeezed
Carney insisted his former deputy should not have lost her job.
Hogg quit her post after less than a month in the role amid pressure over the potential conflict of interest, which only came to light four years after the policymaker started working at Britain's central bank.
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Hogg (centre) has resigned after a reported conflict of interests
Mr Carney's right-hand woman broke the Bank's code of conduct by failing to notify the Bank about her brother working for Barclays – a bank that she would have overseen through her role.
In addition, households are set to feel budgets squeezed, as living costs hit 2.3 per cent – cancelling out wage growth and returns on cash.
Just one out of 793 savings accounts on the market can beat or match inflation, according to Moneyfacts.co.uk.