The world s largest banks are too-big-to-fail and pose a major threat to the global economy.
They launched an attack on the banking industry with Lagarde accusing bankers of obstructing vital reforms needed to make the system safer.
Progress is too slow and the finish line is far off.
Some of this arises from the sheer complexity of the task at hand. Lagarde said banks deemed too-big-to-fail are major sources of systemic risk and are backed by an implicit subsidy from taxpayers of more than £40 billion in the US and £180 billion in
People want to skirt the rules will find creative ways of doing so for a change of culture in the banking industry. The behaviour of the financial sector has not changed in a number of dimensions since the crisis.
Some changes in behaviour are taking place, these are not deep or broad enough. The industry prizes short-term profit over long-term prudence, bonus over tomorrow s relationship.
Carney accused bankers of operating in a privileged heads-I-win-tails-you-lose bubble where taxpayer money is to prop up the system in times of crisis.
The most severe blow to public trust was the revelation that there were scores of too-big-to-fail institutions operating in the heart of finance.
Bankers made enormous sums in the run-up to the crisis and were well compensated after it hit. Taxpayers picked up the tab for their failures.
That unjust sharing of risk and reward contributed directly to inequality but more importantly has had a corrosive effect on the broader social fabric of which finances is part and on which it relies.
It is time to restore capitalism to the capitalists by ending too-big-to-fail. It would mean that if banks do fail they can be resolved without severe disruption to the financial system and without exposing the taxpayer to loss.
Many of the scandals have rocked in the industry such as the rigging of Libor and the currency markets and cases of money laundering violate the most basic ethical norms.
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