October 24, 2013 - More reforms are needed in the financial sector if Britain is to remain a global business hub, the governor of the Bank of England said Thursday in a wide-ranging speech in which he also offered banks greater access to emergency loans.

Mark Carney says the reforms that followed the 2008 financial crisis are insufficient for a city like London. He told a gathering marking the 125th anniversary of the Financial Times that not only banks, but also other financial groups should be subject to tougher scrutiny.

Internationally, regulators need to link up better to protect taxpayers from having to pay for costly bailouts, he said.

"Without a credible means to resolve failing banks, regulatory Balkanization will continue as national regulators seek to protect their own interests, threatening the efficient operation of the international financial system and accordingly London's competitiveness," he said. "To avoid these risks, we need to make the resolution of global banks a real option."

Carney said banks could no longer expect to cash in on risky trades and expect public money to support them when things go wrong. Fairness "demands the end of a system that privatizes gains but socializes losses," he said. This is especially important in a country like Britain, where banking assets are now four times time size of the economy.

Britain and other European countries are trying to set up a banking union, a set of regulators and authorities that have the financial firepower to wind down banks that run into trouble. Some in Britain, however, worry that a common European regulator might be tougher on London's lucrative financial sector.

"The U.K. can no longer dictate standards," Carney said. "Rather than ruling the waves, we must spur collective action through a demonstrated commitment to openness and the promotion of better ideas."

To help keep the banks stable, Carney said the Bank of England would make money available to them for longer terms and at cheaper rates. In the future, it will also consider whether to allow non-banks to access such lending facilities and whether it should provide loans in currencies other than sterling.

"Five simple words describe our approach: we are open for business," Carney said.

Carney made a point of saying it's not up to the Bank of England and regulators to decide how big the financial industry should be - just that it is safe. Activity in the financial services sector accounts for one-tenth of British annual GDP and over 1 million jobs. Critics have argued the industry has gotten too big and that he economy needs to be more balanced.

Carney noted that markets which were more transparent, such as equity markets and exchange-traded futures and options, performed better. Fixed income and derivatives markets should meet similar standards, he said.

"The combination of such reforms and the experience of the crisis will mean that institutions both need more collateral and need to manage it better," he said "Fortunately financial markets know how to innovate."