Bank of England Head Carney Hangs Out His Shingle: Financial Cancer Welcome Here

October 28, 2013 • 8:53AM

The new head of the Bank of England, Mark Carney, who took office in August of this year, intends to make the City of London even more friendly than it is now to cancerous financial speculation, if you can imagine that.

In his first major speech on financial regulation, Carney, a former Goldman Sachs banker, told an audience organized by the Financial Times: "Five simple words describe our approach: we are open for business." Among other things, he announced relaxed rules for collateral that banks must provide in exchange for Bank of England funds.

In an Oct. 26 article in the Telegraph, Kamal Ahmed gushed: "The new Governor has shown a proper understanding of the role financial services play in Britain's economic health. Yes, the banking sector might be four times the size of the UK's national income—a figure Mr. Carney suggested could rise to nine times by 2050—but as long as that system is resilient and the taxpayer protected from ever having to bail out institutions again, it does not need to be a problem." Ahmed quoted Carney saying: "The UK stands to benefit because of London's place at the heart of the global financial system." Therefore, the Bank of England "will now offer liquidity against a wider range of collateral, offer it over a longer period and lower the cost of the facilities," Ahmed reported. "The City, after all, does support a million jobs in the UK, two-thirds of them outside the capital."

Ahmed also urged Carney, and the Confederation of British Industry, to put an end once and for all to any thought of ring-fencing or anything vaguely resembling bank separation—let alone a serious Glass-Steagall anti-cancer treatment—lest the City of London's preeminent role in world finance be threatened.