So let me start with a Hollywood story. As you may know, Disney was recently faced with the challenge of creating a sequel to the original Mary Poppins movie, which has delighted children and adults for more than half a century.
The producers of the new film recreated the magical nanny from P.L. Travers’s books, but they also featured a new cast of characters—including a villain who could give everybody a good scare. That villain—yes, you guessed it—is a slick banker who is cheating his way to fortune. In the end, of course, the villain is defeated with a touch of magic.
So here is the question: why is the banker the villain? After all, a healthy economy requires a healthy financial sector that is at the service of people as they pursue better lives for themselves and their children.
You might call it the “everyday magic” of finance: helping families buy a home or save for retirement; helping businesses raise capital to support growth and employment; and helping ordinary people manage risks and prepare for a rainy day. That is what most financial professionals do every day, with dedication and a sense of pride.
And yet, despite these good aspects, the caricature of the “bad banker” has resonated with audiences since the dawn of civilization. And its latest version—seen by millions of children around the world—is telling us something about the deeply felt sense of unease about the role of finance in today’s world.
It does not take magic to trace much of this most recent frustration back to the global financial crisis, which has left painful economic and psychological scars on millions of people. We know also that many people are angry about the steady drip-drip of financial scandals and misconduct that have occurred all over the world.
Indeed, financial globalization has been one of the key drivers of what Theodore Roosevelt called the “swollen fortunes for the few”. It seems we may now be in a new Gilded Age, with high economic inequality and low social mobility. On Wall Street, for example, overall compensation levels have been reaching record highs, and there is a similar trend of moving back to pre-crisis pay levels in other financial centers.
No wonder that growing concerns about finance can be heard across the political spectrum—and not just about the issues of the day, but about the fundamental purpose of this industry. In too many cases, the financial sector has strayed from its original, noble purpose. And too often, it has worked hard to serve itself rather than serve people and the economy at large.
Surely, there must be a better way forward—which brings me to my theme: I believe that we can build a better financial sector—one that is safer, more sustainable, and ethically sound. A financial industry with a broader sense of purpose. In this vein, the U.K. has launched a national conversation on how to enhance the social impact of investing—furthering the goal of doing good while making a return.
This goal is not just morally just; it is economically right. Why? Because a better financial sector is more important than ever to help deliver on what our 21st century so badly needs: higher employment, greener growth, and good living standards for all.
The key to achieving this goal is to reshape finance into something that is more aligned with societal values and more connected to the interests of all stakeholders: from customers, to workers, to shareholders, to local communities and future generations. To do this, we will need more than just a touch of Mary’s famous brolly. So let me propose two questions:
- First, how can we make the financial system safer—to encourage the good, not the bad, side of finance?
- Second, how can the financial sector support long-term growth that is more sustainable and more inclusive?
- How can we make the system safer?