Britain on Wednesday recommended tougher measures to end market abuses and longer prison sentences for those who break the law, after a series of scandals rocked the financial sector.
"The age of irresponsibility is over," declared Bank of England governor Mark Carney in an address to the financial community in London's banking district, where he spoke alongside British Chancellor George Osborne.
"Criminal sanctions should be updated, with market abuse rules similarly extended and maximum prison terms lengthened," said Carney, a 50-year-old Canadian who has led the central bank since 2013.
Carney and Osborne spoke as the central bank published its final report of the Fair and Effective Markets Review (FEMR), which was launched in the wake of a series of financial scandals over market manipulation.
The review called for criminal sanctions for abuses to be extended to Britain's commodity, currency and fixed-income markets, and for jail sentences to be lengthened to up to 10 years.
Osborne, the finance minister, said that rather than endangering London's competitiveness as a banking hub, reforms would "ensure trust in our markets and strengthen London's global leadership position".
"The public rightly asks why it is that after so many scandals, and such cost to the country, so few individuals have faced punishment in the courts," Osborne said.
"The governor and I agree: individuals who fraudulently manipulate markets and commit financial crime should be treated like the criminals they are -- and they will be."
The chief executive of the British Bankers' Association Anthony Browne said the measures should give customers "greater clarity and protection".
"It's vital that London once again sets the gold standard for fair dealing and integrity in financial markets," Brown said.
"We welcome the intention to extend regulation from banks to other types of trading organisations."
- Great fire of London -
Using the metaphor of the Great Fire of London, which destroyed much of the capital in the 17th century, Carney said that London's poor market infrastructure allowed a sub-prime mortgage crisis in the United States to spread and cause "the worst recession in our lifetimes".
"Though markets can be powerful drivers of prosperity, markets can go wrong. Left unattended, they are prone to instability, excess and abuse," Carney said.
"Markets without the right standards are like cities without building codes, fire brigades or insurance."
Unclear rules, weak enforcement, a system vulnerable to collusion, and risk-taking incentives had combined to cause an "ethical drift", Carney said.
He said abuses had undermined trust in the financial sector, damaging confidence and weakening the economy.
The central banker noted the importance of the financial sector for Britain's economy, noting that it employed 350,000 an contributed £130 billion ($202 billion, 178 billion euros) to the national income.
Given London's pre-eminence in finance, it was the city's responsibility to set worldwide standards, Carney said.
The FEMR review, drawn up by the central bank, the Treasury and the Financial Conduct authority, recommends better training and that individuals and senior management be held to account.
It calls for new civil and criminal market abuse rules for foreign exchange dealing in Britain and coordinated international action to ensure "fairness and effectiveness" where possible.