Capitalism is in danger of eating itself, says
That something is the way the world operates in the aftermath of its most profound economic shock of the postwar era. This has been a period of slow growth, rising inequality and - as the results of the elections to the European parliament show - political alienation. People struggling to cope with wages that don't keep pace with inflation feel that they are paying the price of a crisis they did not cause while the perpetrators of the crime get away scot free.
Carney's message was that trust in financial markets has been strained by the often crooked activities of the bankers. Supposedly rugged markets have in fact been rigged, and this needs to change through tougher regulation, reform of compensation and the willingness of bankers to realise that it is in their own long-term interests to behave more responsibly. Eyebrows were raised last autumn when Carney made what was seen as a strongly pro-City speech. This time his approach was more combative, but still broadly positive. Change was happening, the Bank of
Lagarde's offering was less optimistic but more realistic. The financial sector, she said, was doing its utmost to resist reform. There was too little progress on too-big-to-fail banks and the industry still prized short-term profit over long-term prudence. All true.
What's more, she cut through all the handwringing about inequality by noting that policymakers needed to do more than talk about closing the gap between rich and poor: they needed to act, through more progressive taxes. Also true but, like action on reforming the activities and culture of the banks, it is not really happening.
One final point. Carney and Lagarde were speaking at a conference called "inclusive capitalism" held at
Most Popular Stories
- National Retail Federation Reduces Sales Forecast
- Amazon Hiring on Calif.'s Central Coast
- Sporty Ford Fiesta Fires on All 3 Cylinders
- Prison Workers Wanted
- Pandora Tumbles in Late Trading
- Jennifer Lopez Throws Big Bash for Birthday
- Small Firms Take Out the Trash in Jersey
- Execs Help Entrepreneurs, Get Chevy Volts
- Citigroup Unit Paying $5 Million to Settle SEC Charges
- Obama Seeks Help From Central American Leaders