IMF's Christine Lagarde attacks bonus culture
IMF chief called on G20 to push ahead with pay reforms 'because the behaviour of the financial sector has not changed fundamentally'
Tuesday 27 May 2014
Christine Lagarde, managing director of the International Monetary Fund, has criticised the bonus culture of the financial world as she urged effective action to tackle too-big-to-fail banks.
Speaking at the Inclusive Capitalism conference in London, organised by Lynn Forester de Rothschild, she called for the G20 to push ahead with pay reforms “because the behaviour of the financial sector has not changed fundamentally in a number of dimensions since the financial crisis”.
Against the backdrop of several leading banks caught in scandals over the fixing of Libor rates, foreign-exchange rigging and money laundering, Lagarde said: “Although some changes in behaviour are taking place, these are not deep or broad enough. The industry still prizes short-term profit over long-term prudence, today’s bonus over tomorrow’s relationship.”
Fellow speaker Prince Charles also called for capitalism “to move away from the short term and focus on the long term”.
Lagarde attacked banks for resisting efforts to reform the financial system to allow the biggest financial institutions to fail safely.
“The bad news is that progress is still too slow, and the finish line is still too far off. Some of this arises from the sheer complexity of the task at hand. Yet, we must acknowledge that it also stems from fierce industry pushback, and from the fatigue that is bound to set in at this point in a long race.”
IMF figures show too-big-to-fail banks are still major sources of systemic risks, with implicit subsidies amounting to around $70 billion (£41.58 billion) in the US, and up to $300 billion in the eurozone.
“Clearly, ending too-big-to-fail must be a priority. That means tougher regulation and tighter supervision,” she added.
- 1 Half of young women unable to ‘locate vagina’ and 65% find it difficult to say the word
- 2 Perez Hilton apologises for Jennifer Lawrence naked photo leak
- 3 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
- 4 Mexican woman becomes world’s 'oldest person' at 127
- 5 Jennifer Lawrence 'naked sex video' will be leaked threatens 4Chan celebrity photo hacker
Perez Hilton apologises for Jennifer Lawrence naked photo leak
Ariana Grande nude photos leak: 'These are completely fake' say singer's representatives
A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Israel to appropriate 400 hectares in West Bank for ‘state use’
Kate Upton nude pictures leak: Model's representatives 'looking into' authenticity of naked images
Rotherham child sex abuse scandal: Labour Home Office to be probed over what Tony Blair's government knew - and when
What do immigrants really think of Britain? Polish immigrant's Reddit post goes viral
Ashya King: Parents of five-year-old boy refused permission to visit him in hospital and denied bail at Spanish court
With Douglas Carswell joining Ukip, my party has taken another giant step forward
When elitism grips the top of British society to this extent, there is only one answer: abolish private schools
Ukip Douglas Carswell defection: Tory MP jumps ship to join Nigel Farage
iJobs Money & Business
£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...
£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...
£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...
£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...