EDMONTON – Young people at the start of their careers must learn to balance their own hopes and ambitions with the needs of the world around them, says Bank of England Governor Mark Carney.
Speaking at the University of Alberta, the Edmonton-born central banker said previous financial crises have been partly caused by business forgetting its role in society.
“The severity of the financial crisis showed what happens when those responsibilities are not widely held,” Carney said in a prepared text for a speech at spring convocation.
“In the runup to the crisis, banking became about banks not businesses; transactions not relations; counterparties not clients. The crisis undermined trust, and with it the social capital needed for markets to be effective.”
Carney said businesses must embrace a larger social purpose.
“Profit is no more the purpose of business than is breathing the purpose of living,” he said.
“The best organizations are grounded in broader purposes, in crafting solutions for others. Banking, for instance, is fundamentally about connecting borrowers and savers in the real economy.”
Carney told students that the world they are about to enter is starting to understand that balance.
“Now, the best in finance are regaining their sense of purpose by recognizing that finance is not an end in itself, but a means to promote investment, innovation, growth and prosperity.”
Carney quoted Adam Smith and Frederich Hayek — two economists often noted by right-leaning thinkers — to make his point.
“Economic and political philosophers from Adam Smith to Frederick Hayek have long espoused the importance of values, beliefs and culture in economic life.”
Carney, a former Bank of Canada governor, met Monday with Alberta Premier Rachel Notley and afterwards praised the province’s climate-change plan. He said Alberta is on the right track by tying its energy and environmental policies together.
Carney was in Edmonton to receive an honorary doctor of laws degree from the university.
— Follow Bob Weber on Twitter at @row1960