Head of Bank of England issues plea to stay the course on financial system reforms

Mark Carney stressed that many of the reforms - although small - would pay-off 'very far' into the future

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The Independent Online

The governor of the Bank of England has warned that politicians and bankers must resist "reform fatigue" over the process making the financial system safer.

Speaking at a conference in Istanbul ahead of a meeting of G20 finance ministers and central bankers, Mark Carney, who is also chair of the international Financial Stability Board, said: “I worry about reform fatigue, not surprisingly, both at the FSB and more generally.” In a thinly-veiled plea for politicians and global bankers to stay the course on complex long-term reforms, he added: “Many of the toughest reforms are micro-reforms that can have big political coalitions against them and have pay-off very far into the future.”

But he also stressed there were “huge benefits” to the reforms and although the financial system is less likely to amplify initial shocks than in 2008, Carney warned there was no still no room for complacency about its resilience.

The Governor is likely to oversee the Bank’s first ever forecast of an inflation rate below zero later this week due to plunging oil and food prices.

But he also struck a more upbeat tone on the UK economy amid early signs of wage growth.

Financial markets currently believe the Bank will not move on interest rates until mid-2016.

However, the Governor said: “In the UK we’ve had a lot of job creation, not a lot of productivity, but a lot of job creation and relatively muted wage performance.

“We’re just starting to see the turn in wages that we need for a sustainable recovery.”