Dr Mark Carney, the Governor of the Bank of England, delivered a speech yesterday at the Mansion House in London titled 'Building real markets for the good of the people': see here (pdf). A few hours earlier, the final report and recommendations of the Fair and Effective Markets Review (FEMR) had been published. Here are some extracts from Dr Carney's speech, in which he endorsed the FEMR report:Markets are not ends in themselves, but powerful means for prosperity and security for all. As such they need to retain the consent of society – a social licence – to be allowed to operate, innovate and grow. Repeated episodes of misconduct have called that social licence into question. ... Real markets are resilient, fair and effective. They maintain their social licence ... We need a better balance between individual and firm accountability ... [I]ndividuals must be held to account ... [F]irms must take greater responsibility for the system by improving the quality, clarity and market-wide understanding of FICC trading practices ... [K]ey elements of the Senior Managers Regime should be extended to all firms active in wholesale FICC markets, including dealers and asset managers. That means all senior managers would have clearly defined responsibilities and would be answerable for training, certifying and monitoring the material risk takers they supervise ... It’s vital that we – public authorities and private market participants – work together to reverse the tide of ethical drift. This cannot be a one-off exercise. We need continuous engagement so that market infrastructure keeps pace with market innovation."
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