28 Jan 2013

Next two years decisive for banks - Carney

9:08 am on 28 January 2013

The incoming governor of the Bank of England has said the next two years will be decisive for bank reform.

Mark Carney, current governor of the Bank of Canada, said "shadow banking" and the issue of "too big to fail" would be tackled.

The 2008 crisis would be repeated if unregulated financial activities - blamed for amplifying the meltdown - went unchallenged, he said.

He also warned that central banks alone could not eliminate "tail risks".

He said that, contrary to some reports, tail risks - essentially worst-case scenarios - in Europe and the United States remained.

Shadow banks are companies that operate like banks but fall outside current oversight, the BBC reports.

"The next two years will be decisive on ending 'too big to fail' [for banks] and addressing shadow banking and over-the-counter derivatives, that absolutely amplified the last crisis - and will do so again if we don't complete our agenda," he told an audience at the World Economic Forum in Davos.