Banks must refocus to help economy: Carney
Banks risk becoming socially useless unless they focus on the real economy and help businesses invest and create jobs, Bank of England governor Mark Carney has said.
Mr Carney said banking culture has to change and financiers should not be disconnected from society.
He stressed that the attitude within the sector that leads to mis-selling of banking products to customers to turn a profit undermines the effectiveness of banks.
Mr Carney said on BBC Radio 4's Today programme: "The cultural issue is fundamentally important. There has to be a change in the culture of these institutions. It's something I've spoken about in the past.
"I think finance can absolutely play a socially useful and an economically useful function but what it needs in order to do so, the focus has to be, of the financier, the people working in the banking system, has to be on the real economy, what it does for businesses making investment, what ultimately it means for jobs.
"And it's the loss of that focus, it's finance that becomes disconnected from the economy, from society, finance that only talks to itself and deals with each other, that becomes socially useless.
"One of my other responsibilities is chairing the Financial Stability Board and a lot of what we're doing there is to strip out that type of behaviour."
Asked whether people working for banks should sell a product to a customer to make a profit, even if they know the product was bad for the customer, Mr Carney said: "Absolutely you shouldn't sell it.
"It's that attitude in institutions that undercuts their effectiveness... and to the extent that with our powers we can use them, we work to snuff them out."
The governor also said he had "tremendous sympathy" for savers hit by the Bank stating that interest rates will not rise from their record low until more than 750,000 new jobs have been created.
Households and businesses are not to expect interest rate rises for at least the next three years as Mr Carney said rates will remain at 0.5% until the unemployment rate drops to 7%, depending on stable inflation.
Mr Carney said the best way to get back to normal interest rates is to have a strong economy.
Prime Minister David Cameron insisted he was "confident" the economy would create jobs, and hailed Mr Carney's forward guidance on interest rates as a vote of confidence in Government policy.
The number of new jobs which need to be created before an interest rate rise