Several major foreign banks and their employees have been charged with criminal activity, including the manipulation of financial benchmarks, such as LIBOR, money laundering, unlawful foreclosure and the unauthorized use of client funds. These abuses have raised fundamental doubts about the core values of financial institutions. In my remarks today, I will discuss the breakdown of trust and what is required to rebuild it.
One might argue that the fiscal rules were, in fact, tightened in the aftermath of the crisis – Stability and Growth Pact, fiscal compact and European semester are concepts which come to mind. Undoubtedly, these were steps in the right direction. But whether these tightened rules will have the desired binding effect remains to be seen.