By Huw Jones and David Milliken
LONDON (Reuters) - Bankers hoping to move on from the financial failures and scandals of 2008 and afterwards got little succour from Britain's top two financial officials on Wednesday, who told them the time was not right.
It is "totally understandable" that the public is still angry at about bailing out banks in 2008 and not enough time has passed for the more stringent banking regulation to be relaxed, British finance minister George Osborne said at a conference.
Bank of England Governor Mark Carney said much the same in a television interview.
"Neither I nor my successors will be 'hugging a banker'. Ultimately we want to get to a point where people can respect bankers," he said.
Osborne and Carney were both attending a BoE conference examining whether enough has been done to rein in reckless behaviour by banks that have been fined millions of pounds for trying to rig the Libor interest rate benchmark and currency markets.
"The idea that just a couple of years on you can go 'you can forget about all of that' and move on, is, I think, a bit optimistic. It is going to take time," Osborne said.
He added that traders should look at the big fines levied on the banks for misconduct and ask themselves whether the "extra buck on the trading floor" was worth it.
Speaking at the conference, Carney said a welter of new rules had made banks more resilient to shocks and unlikely to need a taxpayer bailout again in future.
But he sought to answer criticism from banks that new rules were rushed through, creating unnecessary complexity that is making lending to companies too burdensome.
"Given the complexity and scale of financial reform, it would be remarkable if every measure were perfectly constructed. Or if they all fit seamlessly into a totally coherent, self reinforcing whole," Carney said.
"Authorities must have the courage to listen, the honesty to admit our mistakes and the confidence to set them right."
BoE Deputy Governor Andrew Bailey said that while some of the new regulation was "wrong", many of the consequences of new rules that have been criticised by banks were fully intended and would change the business models of lenders.
"The aim is not to return to a pre-crisis state of the world," Bailey said.
Many of the new rules have come from the European Union but there were signs of greater willingness in Brussels to make changes where needed, Bailey added.
DISCONNECT
Governments and regulators are keen for the banking sector to move on from the crisis and turn their focus away from replenishing capital to helping the economy grow.
Low public trust in the sector was making this more difficult, Carney and BoE Deputy Governor Jon Cunliffe said, referring to a "disconnect" between how banks view themselves, and "evaporated" public trust despite a mass of rules aimed at making the sector resilient and more accountable.
"We need to develop a clearer and better narrative on where things have got better. An enormous amount has been done," Cunliffe said.
Osborne wants Britain to become the top global centre for financial technology and said he was making sure regulators provided space for this and digital currencies to innovate.
However, Osborne said Britain still faced the dilemma of how to develop a vibrant financial services sector while ensuring that taxpayers were off the hook.
Earlier on Wednesday the chairman of Barclays (L:BARC), who heads an industry lobby group, said a new tax on banks posed a long-term threat to Britain's attractiveness to the financial sector.
Investors said banks had work to do to make themselves attractive.
Nigel Wilson, group chief executive of Legal & General (L:LGEN), said risk was still very opaque in the European banking system, making it "uninvestable".
"We are seeing in Europe a shrinking of the banking system and the opening of opportunities for firms like us," Wilson said.
