Financial sector ‘dampens’ economic shocks - Carney

BoE boss Mark Carney
BoE boss Mark Carney

The financial sector is now more likely to “dampen shocks” in the world economy “rather than amplify them”, Mark Carney has said in a letter to G20 leaders as they prepare to meet this weekend.

Mr Carney, the Governor of the Bank of England, has written the letter in his role as chairman of the Financial Stability Board, an international body which monitors the global financial system.

He advises the leaders of the world’s largest economies that the financial sector is now well placed to deal with any turmoil thanks to reforms put in place in the wake of the last financial crisis.

He said: “Events this year have shown that the work to fix the fault lines that led to the financial crisis is paying off and is now helping to support strong, sustainable and balanced growth.

“Thanks to your commitment to rigorous implementation of G20 reforms, the financial sector is now more likely to dampen shocks rather than amplify them.”

However, he also outlines concerns about levels of misconduct within the financial sector.

“In recent years, the incidence of financial sector misconduct has risen to a level that has the potential to create systemic risks by undermining trust in both financial institutions and markets.”

The summit will take place on Sunday and Monday in Hangzhou, China. PM Theresa May is due to attend.