BoE governor Mark Carney in globalisation warning

The Bank of England governor Mark Carney has warned that those left behind by the financial crisis need more help.

Mr Carney said that people had paid "a heavy price" for globalisation but had come to associate it with low wages, insecure employment, stateless corporations and "striking inequalities".

He said: "Many citizens in advanced economies are facing heightened uncertainty, lamenting a loss of control and losing trust in the system.

"To them, measures of aggregate progress bear little relation to their own experience."

He said that those anxieties had been made worse by the "twin crises of solvency and integrity at the heart of finance".

"When the financial crisis hit, the world's largest banks were shown to be operating in a "heads-I-win-tails-you-lose"
bubble; widespread rigging of some core markets was exposed; and masters of the universe
became minions.

"Few in positions of responsibility took theirs.

"Shareholders, taxpayers and citizens paid the heavy price."

But Mr Carney also said that monetary policy was not to blame for the problems, saying: "In the end, monetary policy isn't a spectre but a friendly ghost".

He implored the UK's politicians and central bankers to act urgently to stop people from losing faith in the system, adding: "Turning our backs on open markets would be a tragedy but it is a possibility".

In a speech given at Liverpool's John Moores University, Mr Carney went through a number of examples of the growing inequality in the UK.

Among them was what he described as a "growing disparity between older home owners and younger renters".

He said that, while a typical millennial earns £8,000 less during their 20s than their predecessors, those over 60 have seen their incomes rise at five times the rate of the rest of the population since 2007.

He also said that the country's leaders must "turn back the tide of stateless corporations", backing the Prime Minister Theresa May, who has said that companies must be rooted and pay tax somewhere.

In suggesting ways to fix the problems, Mr Carney said economists needed to acknowledge the challenges faced by the country, including the realities of uneven gains from trade and technology.

Secondly, Mr Carney said the UK had to grow its economy by re-balancing the mix of monetary policy, fiscal policy and structural reforms.

And, thirdly, the UK needed to "move towards more inclusive growth where everyone has a stake in globalisation".

Sky (Frankfurt: 893517 - news) 's Economics Editor Ed Conway said: "This speech is important because tonight Mr Carney effectively admitted globalisation is not working - and insisted that the Government needed to do more, urgently, to try to resolve the problem.

"Such comments might sound extraordinary enough coming from any economist. Coming from the Bank of England governor, they are dynamite."