Mark Carney says hes willing to blow the whistle on misbehaving banks

OTTAWA – Bank of Canada governor Mark Carney says he is willing to blow the whistle on banks that break international norms or don’t comply with reforms designed to prevent a repeat of the 2008 financial crisis.In a BBC interview broadcast Thursday morning London time, the Canadian central banker said recent scandals have delivered “some hits” to the reputation of the banking system, adding that it is essential that confidence be restored.“One of the things we’re doing as international regulators … is not just designing rules but we’re auditing the countries from the U.K. to Canada to China to see whether they’re actually implementing these new rules,” he said, speaking in his dual role of head of the Swiss-based Financial Stability Board.[np-related]“And if they don’t, we’re going straight to the top. We’re going to the leaders of the G20, and we’re going to the media and the general public, and we’re letting people know who’s on track and who’s lagging behind.”He added that he believed financial institutions are complying so far with the new capital requirements and that the world is “moving in the right direction to ensure ending the problem of ‘Too Big to Fail’ ” banks so that taxpayers need not be forced to bail them out.Carney did not directly respond to the scandals that have emerged involving mostly London banks, including the LIBOR rate rigging controversy and accusations of money laundering, other than saying they need to shape up.“These are big, complex banks, they deal with a range of countries and a range of types of transactions, and the senior executives have to be on top of all of that,” he said. “And if they can’t be on top of all of that, they need to shed businesses and activities.”As for Canada’s banks, Carney said they may have some exposure to record household debt levels and the overheated housing market, but he noted that high-risk mortgages are insured by the federal government.“Our banking system is still … one of the strongest in the world,” he said. “We’ve got one of the highest capital ratios, we’ve got the lowest liquidity.” In fact, he said Canada’s banks will be able to meet the 2019 Basel capital requirements by Jan. 1, six years ahead of time. Screen shot read more