In comment on the Bank of England's open forum, Professor Mark Taylor, Dean of Warwick Business School, said: "The financial crisis and the scandals that have plagued the financial sector have seen new regulations put in place, but regulation by itself is not enough.
“There really has to be a shift in culture in the financial sector; doctors are trained to think in an ethical fashion and bankers also have to think in an ethical fashion. The banking sector reached its low point when a trader wrote in a chat room: ‘if you ain’t cheating, then you ain’t trying’. That’s clearly not right. We need ethical conduct in banking. One way of doing this is through the Bank of England’s Open Forum, involving the public, pushing financiers to think more ethically.
“The financial crisis, as Mark Carney pointed out, was a twin crisis – a crisis in solvency and a crisis in the legitimacy of finance. The Bank has done its best to improve liquidity and solvency in the financial system through measures such as Quantitative Easing and the Help to Buy scheme. Quantitative Easing is an unorthodox method that was needed to pump money into the system. In the same way, we are now seeing a kind of ‘ethical Quantitative Easing’ from the Bank, where they are attempting to inject ethical conduct into the financial system and to regain legitimacy for financiers by involving the public in that process.
“Mark Carney is on a charm offensive in order to encourage the public to think about bankers in a better way. After all we need a strong financial sector, it represents eight per cent of the UK’s GDP and 20 per cent of income in London alone. It is an important part of the economy, and in order to grow other sectors like manufacturing we need a strong financial sector. But the banking sector needs to act ethically and in the best interests of society for it to work properly. We need bankers to think of their impact on society and not just on their wallet.”
Professor Mark Taylor, Dean of Warwick Business School, is a former senior economist at the Bank of England and was on the advisory board of the Bank of England’s Fair and Effective Markets Review (FEMR).
