Outgoing Bank of England governor Mark Carney. Picture: REUTERS
Outgoing Bank of England governor Mark Carney. Picture: REUTERS

London — Bank of England (BOE) governor Mark Carney spoke to lawmakers in Britain’s parliament on Tuesday. Here are highlights of his comments.

‘Powerful and timely’ response to coronavirus

“The lines of communication globally between central banks are wide open, the lines of communication between ourselves and the treasury are operating exceptionally well. It is reasonable to expect a response that reflects a combination of fiscal measures and central bank initiatives.

Across jurisdictions there will some difference in the exact form of those measures and the exact timing, but the response will share a common goal, which is to achieve this bridging, and support the economy through a potentially challenging period.

We are confident that, collectively, these measures, both within jurisdiction and across jurisdictions, will be both powerful and timely.”

China and Hong Kong slowdown stress tests

“We have run, [for the] past couple of years, severe China slowdown and Hong Kong slowdown stress tests. That’s just the shock, we assume a shock, not this specific one, that emanates from greater China, that then propagates through the global economy, has very severe effects on financial markets, different effects from what we are seeing.

[The tests model] the opposite of what we are seeing right now; we are seeing government bond yields falling quite substantially, which provides some stimulus to the economy if it persists, as one example. And while we have seen a repricing of risk assets, we haven’t seen anything like the orders of magnitude that we ran through the tests.”

Leaking of BOE audio feeds

“[This was a] wholly unacceptable situation and, as you can appreciate, is subject to an investigation by the Financial Conduct Authority (FCA), which limits exactly the extent to which I can go into it.

We referred the incident and the parties involved in the incident [to the FCA], which would include not just the technical party related to the audio link but the parties who used the information.

We will release the findings of the report [into the breach] and management response [in April]. We’ve also asked the FCA to look at this behaviour of market participants relative to their responsibilities under both the FX code and the money market code.”


“The BOE’s role is to help UK businesses and households manage through an economic shock that could prove large but will ultimately be temporary. The bank will take all necessary steps to support the UK economy and financial system consistent with its statutory responsibilities.

We are monitoring the [coronavirus] situation closely across all our functions and ensuring all necessary contingency plans are in place. The monetary policy committee (MPC) is assessing the economic impacts and considering the policy implications of various possible scenarios, including the extent to which supply disruptions have aggregate demand consequences via cash flow, cost and availability of finance, as well as confidence effects.

“The financial policy committee (FPC) is examining macro-financial impacts, including spillovers to market functioning and how to address any possible constraints on financing to UK businesses and households that might emerge.

“The FPC, MPC and prudential regulation committee (PRC) met jointly yesterday to review a range of macro-economic and financial system scenarios and their implications, and they will continue to meet as needed and will act as appropriate.

Andrew Bailey and I are in continual contact on the whole range of issues consistent with our statutory duties and to ensure a smooth transition on 16 March.

The chancellor and I have had a series of discussions, and BOE officials are in regular contact with their counterparts at the  treasury and the FCA. We are in frequent contact with our international peers, including at the G7, G20 and the International Monetary Fund (IMF).” 


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