From credit crisis to resilience

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In his second Reith Lecture Mark Carney points out that the crisis should not have been such a surprise in the light of centuries of economic history, with pointers such as debt, complexity, and excessive reliance on markets for liquidity. There was reluctance, amongst those with the political and regulatory power to act, to consider what “might” happen and what the consequences might be.

He points to a deep crisis in our values. The “masters of the universe” focused neither on the longer term consequence of their actions, nor on the impact on their ultimate, often distant, clients. He calls for a change in attitude among business leaders, towards a long term mentality, thinking of themselves as custodians of their institutions, improving them before passing them to their successors. But pay design, codes and regulations by themselves will not be enough to create the necessary culture of responsibility, solidarity, integrity and prudence.

Watch the lecture!