Repeated scandals at the trading desks of major banks show that the sector's compensation needs to be regulated to stop encouraging risky behavior and misconduct, Mark Carney, governor of the Bank of England, said.
"Fundamental changes are needed to institutionally alter compensation," Carney told an audience at the Monetary Authority of Singapore lecture seri
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Earlier this month, regulators across multiple jurisdictions fined six banks more than $4 billion for their roles in rigging foreign-exchange rates. The Financial Conduct Authority cited failure to improve practices after probes into the rigging of Libor rates -- an investigation which netted around $6 billion in fines on its own.
"Such repeated fines underscore that massive penalties alone are not sufficient to address the issues," Carney said.