We had to hurt savers to rescue Britain's economy, says MARK CARNEY

Three decades ago this month, I began working in the City. Since then, having spent virtually my entire career in and around finance in both the private and public sectors, I've witnessed its promise and its pitfalls.
I've realised that in order to harness the true purpose of finance, we have to resist three big lies that can bedevil it.
The truth is that, when properly run, finance is an immense force for good. Financial institutions, such as banks, should serve us, not the other way around.
They lend us money to buy houses or to start businesses. They look after our savings for the future. They manage our pensions and help protect us against risks.
A decade ago when Lehman Brothers collapsed, and as the three lies of finance were exposed, all of this was put at risk. The first lie was the notion that 'this time is different'.
These are the four most expensive words in the English language.
In the years before the crisis, central bankers brought inflation, the great economic problem of the 1970s and '80s, under control. This ushered in an era of stable growth dubbed the Great Moderation.
Then complacency set in. People thought that economic instability had been eradicated, and that high debt levels were no longer a problem. But boom and bust hadn't been abolished. When the storm came, very few were prepared.
The second lie was that the markets are always right.
Lulled into a false sense of security during the Great Moderation, policy makers began to believe the myth that the market is always right. 
That led them to believe that the less the authorities interfered with the markets, the better – a philosophy that came to be known as light-touch regulation.
But instead of clean, efficient markets, we ended up with a complex web of dodgy sub-prime mortgages, opaque shadow banks and risky derivatives.
This fed a growing bubble that infected many of the world's banks, including our own. When it exploded, everyone suffered.
The third lie is that markets are moral – that they can exist separately from the society they serve.
Real markets fuel prosperity and allow companies to invest, create jobs and grow our economy. If left unattended, however, they can be prone to excess and abuse.
Before the crisis, markets became informal and clubby rather than professional and open. People began to collude online rather than compete on merit.
Few were accountable for their actions. So what is the truth?
Over the past decade, UK authorities, including the Bank of England, have acted on these painful lessons.
Our priority in the aftermath of the global financial crisis was to shore up confidence and encourage households and businesses to continue spending.
That meant the Bank of England's Monetary Policy Committee had to reduce interest rates to record lows. It also meant the Bank had to embark on a programme, called 'Quantitative Easing' in order to inject more money into the economy.
This may not have been a popular policy among some savers, but the truth is that it has helped the UK economy to recover from the financial crisis much more quickly than would otherwise have been the case.
Without this action, real wages would have been 8 per cent lower, or around £2,000 per worker per year, and 1.5m more people would have been out of work. In short, though it may have been painful for some savers, monetary policy has been highly effective.
And since this action, more than 3m jobs have been created, the proportion of people in work has moved to its highest level on record, wages are up more than 20 per cent before adjusting for inflation and real output is up 18 per cent. 
All major income groups, from the highest earners to the lowest, have seen their income and wealth rise, despite the headwinds from the aftermath of the crisis.
The Bank rate has already been increased from its record low of 0.25 per cent to 0.75 per cent and more gradual rate rises are likely, if the economy continues on its current path. Alongside these measures, we have also taken steps to address the underlying 'structural' problems in the financial sector.
To align the values of the market with those of our society, tough new codes and standards are now in place. We've established a new regime that ensures the people who run financial firms are properly accountable for their actions and those of the employees they oversee.
If there's bad conduct, bankers can now lose their bonuses and their jobs, or even face new criminal penalties.
Banks are less complex and more focused on you, their savers, borrowers and small business customers. They now lend to more households and businesses and trade less with each other.
We've replaced toxic shadow banks – financial institutions that were not regulated – with a financial system that serves our businesses far better.
We've made banks more resilient by increasing the safety net they must hold against losses by more than three times. 
And banks now have ten times more assets that are readily available in an emergency than they did before. 
The era of 'heads they win, tails we lose' banking is over. Banks are now structured so that their shareholders and big private debt investors – not taxpayers – will bear the cost of future failures.
And we've ring-fenced the UK's most important High Street banks, so that even if your bank gets into trouble in the City, your local branch can continue to provide the service you need.
Despite the huge progress over the past decade, we can't let complacency set in again. If the experience of the financial crisis can teach policy makers anything, it should be humility.
Instead of believing it's different this time, or hoping that everything will be all right on the night, the Bank of England now thinks about what could go wrong and then prepares our banks so they can keep doing their jobs in case it does.
That's what we've been doing the past few years in preparation for Brexit.
Some of you may have disagreed with some of the things the Bank has said on this topic. But our job is to prepare for the worst, not hope for the best.
By identifying the risks and coming forward with solutions, the Bank is working hard every day to get our financial system in shape for Brexit, whatever form it takes.
That's why, over the next decade and beyond, UK households and businesses will be able to rely on our financial system to serve them in bad times as well as good.
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