02 June 2014
Speaking at a conference called ‘inclusive capitalism’ held at London's Guildhall, both Carney and Lagarde spoke about capitalism and the excesses of this in the financial sector.
Both spoke on how to balance the current inequality in the global economy and the role that the global financial industry plays in to this, as a major player and influencer.
Carney spoke of the excesses that have eroded social capital, saying that ‘market fundamentalism – in the form of light-touch regulation, the belief that bubbles cannot be identified and that markets always clear – contributed directly to the financial crisis and the associated erosion of social capital.’
This has been perpetuated by a loss of a sense responsibility in the last decade or so, which Carney can be seen in ‘unchecked market fundamentalism, [which] can devour the social capital essential for the long-term dynamism of capitalism itself. To counteract this tendency, individuals and their firms must have a sense of their responsibilities for the broader system’.
In order to restore the trust and make the markets work, Carney said that social capital must be rebuilt as ‘prosperity requires not just investment in economic capital, but investment in social capital’.
Lagarde also spoke of the excesses of the financial sector, focusing on the behaviour that ‘continues to deplete the treasury of trust and could again destabilize the global economy’.