UPDATE 1-Bank of Canada says banks to see lower returns

* BoC’s Carney says financial system going to be safer

* Calls bankers “shameless” with short memories

* G20 and IMF looking to have closer ties

HALIFAX, Nova Scotia, Nov 5 (BestGrowthStock) – Global financial
reforms will make the banking industry (Read more about the banking industry recovery.) less profitable,
Canada’s central bank chief said on Friday, while calling
bankers “a little shameless” for forgetting their past errors
so quickly.

Bank of Canada Governor Mark Carney said G20 policy makers
had already asked the financial industry to adopt stricter
rules on capital and liquidity, adding “we’re going to do more
of it.”

“We’re going to change the way it functions. They’re going
to make lower returns. It’s going to be safer,” Carney said in
a panel discussion at a security forum in the East Coast
Canadian city of Halifax.

Carney, a former Goldman Sachs banker himself, predicted
banks would resist pressure to adopt tougher rules, especially
in countries where they did not need taxpayer-funded bailouts.

“Plus … their memories are incredibly short, in terms of
what they did wrong, and they’re also a little shameless. I
used to be a banker so I can say all this,” he said.

In order to make the reform process more inclusive, Carney
said the G20 advanced and emerging economies were in very early
stages of discussing a closer working relationship with the
International Monetary Fund and World Bank, the so-called
Bretton Woods institutions.

“There are very valid discussions about the fusion of the
membership or the structure for the G20 with the the Bretton
Woods institutions, so you would have a more constituency-based
approach as you do with the IMF, so everyone is actually
represented,” Carney said in the panel discussion.

“It is ultimately probably going to be needed for this to
be fully successful,” he said.

Carney said the current mix of fixed and floating
currencies globally was a top threat to financial
stability.

“It’s a mixture of fixed and floating currencies that is
beginning to foster not just disinflationary or deflationary
risks in some advanced countries but inflationary risks in
emerging markets … in a post-crisis environment of tremendous
debt, obviously the former is a great great risk.”
(Reporting by Richard Woodbury; writing by Louise Egan;
editing by Rob Wilson)

UPDATE 1-Bank of Canada says banks to see lower returns