Bank of England executive director of financial stability Andy Haldane believes public anger over the Libor scandal has sparked a “decisive change” in the culture of UK banking.
Speaking to the BBC World at One today, Haldane predicted bank bonuses and salaries will fall further after decades of rapid growth.
He said: “High pay lays bare some of the inequities and inequalities currently embedded in the system. We have seen a shift in the right direction.
“In the middle of the year, at the time of the Libor scandal, I felt something decisive change. It was partly that the public mistrust of the culture of banking had built up to such a point that the sector itself said ‘this has gone wrong’. The language from the industry has changed decisively in the last six months.”
In the wake of the scandal, chancellor George Osborne launched the Parliamentary Commission on Banking Standards to examine the culture of the industry and recommend changes.
Haldane said the crisis has had a similar economic impact as a world war and the public is right to be “on the streets”.
He said: “What has happened is deeply shocking and we cannot afford not to take very seriously all the messages we are hearing, including from the Occupy movement.
“In terms of the loss of incomes and outputs this is as bad as a world war. It would be astonishing if people were not fed up, on the streets and asking big questions about where finance has gone wrong.”