“Just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself,” “A sense of self must be accompanied by a sense of the systemic.” These were the words delivered by the Bank of England Chairman last night at a conference on ‘inclusive capitalism’ organised by the City of London, words aimed directly at the greed of the banking sector.
Carney was not the only ‘big gun’ speaking at the conference, former US president Bill Clinton, Prince Charles and the head of the IMF Christine Lagarde also contributed on a similar theme. Ms Lagarde began the bidding earlier saying that fierce international lobbying was hampering banking reforms taking full effect and therefore continuing the cycle of greed within the banking sector.
The Speech form Carney seems particularly significant as his tone seems markedly different from his early days in office. At the beginning there was a sense of the bank of England being “open for business” and willing to work with the banks. That of course was a breath of fresh air to the markets in contrast to predecessor Mervyn Kings’ often guarded attitude towards the banks. So this move to openly suggest bankers need to be less selfish, though seemingly prudent to the man on the street will likely have been seen as a shot across the bows by those driving the markets.
As you can see below in graphs from the last 24 hours for GBP/EUR & GBP/USD respectively, Sterling certainly paid the short term price for Carneys words:
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Today’s Economic Data Releases
There is very little today in terms of major economic data releases that will affect the major sterling crosses. If you happen to watching GBP/CHF then this morning Swiss GDP figures will be worth noting, a positive figure will likely strengthen the Franc up.
Written by, David Worthington, Wednesday 28th May
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