Left Menu
Development News Edition

FACTBOX-Carney's time at the Bank of England, from Brexit to climate change

Reuters | London | Updated: 14-02-2020 13:42 IST | Created: 14-02-2020 13:31 IST
FACTBOX-Carney's time at the Bank of England, from Brexit to climate change
File photo Image Credit: Wikimedia

Mark Carney, who stands down as Bank of England governor in March, has battled against challenges from zero inflation to the political chaos of Brexit in his nearly seven years at the helm of the world's fifth-biggest economy. Carney spoke to Reuters ahead of his departure:

Below are highlights of his time in charge of the BoE. EARLY DAYS - Carney become the BoE's first foreign governor in its three-century history when he moved to London from his native Canada in 2013. The BoE was still smarting from its slow response to the 2008-09 financial crisis and Britain's finance minister at the time, George Osborne, turned to the man he called the "outstanding central bank governor of his generation" to shake it up.

But Carney struggled to deploy his trademark policy, from his time at the Bank of Canada, of signaling the likely path of interest rates - known as forwarding guidance - with Britain's economy defying the logic of previous recoveries as it emerged from its financial crisis hangover. Unemployment plunged but inflation also fell. Later, a halving of global oil prices knocked Carney's guidance about when rates might rise off course for a second time.

The BoE said its guidance came with caveat but media often interpreted it as more of a guarantee, and one politician dubbed the BoE under Carney as an "unreliable boyfriend." In the end, Bank Rate has changed only three times during Carney's time at the BoE and stands at 0.75%, only 25 basis points higher than when he arrived.

BREXIT SHOCK - With sterling tumbling in the hours after the Brexit referendum results in 2016, Carney won praise for being "the adult in the room," as described by a financial analyst. He delivered a televised address to reassure markets that the BoE would turn on the liquidity taps if needed. His quick response contrasted with the failure of finance minister Osborne to appear in public for three days after the vote. But Carney infuriated Brexit supporters by talking about the economic damage that he said was likely to be caused by leaving the European Union. Lawmaker Jacob Rees-Mogg called him the "high priest of project fear." Carney has said it was his duty to talk about such risks.

Carney's warnings about the economic implications of Scotland splitting from the United Kingdom were seen as a factor dissuading voters to back independence in a 2014 referendum. FINANCIAL REGULATION - Under Carney's watch, banks in Britain were forced to set aside more capital to make sure they would not have to ask taxpayers to bail them out again, as they did in the global financial crisis. In addition, major British banks were asked to hold nearly 1 trillion pounds ($1.3 trillion) in high-quality assets that they could sell quickly to shore themselves up.

Carney and his colleagues began to use new powers to limit how much people could borrow to buy a home and fine-tune the amount of stimulus flowing into the economy by adjusting bank capital requirements. CLIMATE CHANGE - As with Brexit, Carney had to fend off charges of overstepping his remit with his warning to the finance industry of the risks to them from climate change. He first urged companies to be more open about their climate change footprint in 2015, years before other central bankers began talking about the subject. After leaving the BoE, Carney will serve as a United Nations envoy on finance and climate change and will advise Britain's government ahead of a major U.N. climate conference in Glasgow in November.

BANK OF ENGLAND REFORM - Carney inherited a central bank that was already adapting to its newly restored responsibilities for making sure that the finance sector did not bring the economy to its knees again. He made financial stability issues just as important for the BoE as setting interest rates, saying the bank's almost exclusive focus on inflation in the past was "fatally flawed". Carney tried to make the BoE more transparent, doing away with a two-week delay in publishing the minutes of rate meetings, publishing far more of the assumptions underlying BoE forecasts, speaking regularly to the media and explaining decisions with simple graphics on the BoE's website. He almost doubled the share of women in senior roles to 31% and appointed women as chief operating officers. But only one of the BoE's nine current rate-setters - who are mostly appointed by the finance ministry - is female.



New farm bills in India: Focusing on farms or farmers?

... ...

Kenya’s COVID-19 response: Chaos amid lack of information

Confusing numbers and scanty information on how effective curfews and lockdowns have been in breaking transmission have amplified coordination and planning challenges in Kenyas response to COVID-19. Without accurate data, it is impossible t...

Farkhad Akhmedov: Calculating the price of impunity from the law

In insistences such as the battle over the Luna, Akhmedov has resorted to extreme legal machinations to subvert the High Courts decision and keep his assets from being seized. ...

Guinea’s elections hearken back to the autocracy and violence of its past

... ...


Latest News

Australia says invasive search of women at Qatar airport referred to police

An incident at Doha airport in which Australian women were subjected to an invasive search on the tarmac after the discovery of an abandoned newborn baby in the terminal has been referred to Australian federal police, Australia said. Women ...

Singapore temporarily halts use of two flu vaccines after S.Korea deaths

Singapore has temporarily halted the use of two influenza vaccines as a precaution after some people who received them in South Korea died, becoming among the first countries to publicly announce a halt of the vaccines usage. South Korea re...

Golf-Back nine charge powers Cantlay to Zozo Championship win

American Patrick Cantlay staged a back nine charge to speed past world number two Jon Rahm and number three Justin Thomas to claim a one shot win at the Zozo Championship in Thousand Oaks, California on Sunday. Cantlay, who began the day th...

PRESS DIGEST- Financial Times - Oct. 26

The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy. HeadlinesUK considers shorter Covid self-isolation period httpson.ft.com3oqqISWRoyal Mails chairman says...

Give Feedback