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It is only when financial institutions have not only changed but be seen to have changed that we can once again be truly proud of the strength of our banking system.
“Another important step in clearing up the mess left by the financial crisis.”
So tweeted the Chancellor of the Exchequer, George Osborne, following the UK government’s announcement that it had sold £13 billion of former Northern rock mortgages to a US investment firm. According to the Chancellor, the fact that the mortgages are being sold on for more than their book value demonstrates the “strength of global investors’ interest in the UK.”
But if, as the government claims, British taxpayers are on course to recoup more than their initial bailout outlay, does this mean that we can at last view UK banks as being back to full strength? Not necessarily, if comments made recently by the Governor of the Bank of England, Mark Carney, are anything to go by.
Speaking at an open forum, Mr Carney said that “only a third of people believe markets work in the interests of society.” In effect, trust has been shattered and whilst financial institutions may be taking steps to improve, there is still some way to go before that public trust which was once a given has been restored. Financial redress is one thing, but the scars run far deeper and it is only when financial institutions have not only changed but be seen to have changed that we can once again be truly proud of the strength of our banking system.