Mark Carney

Claire Jones Some forward guidance from the Monetary Policy Committee

February 7, 2013 5:52 pm by Claire Jones

Future BoE governor Mark Carney. Getty Images

Bank of England governor-designate Mark Carney talked a lot today about his fondness for so-called “forward guidance” — where a central bank indicates what is likely to happen to monetary policy way beyond its next policy vote.

The theory is that forward guidance boosts growth by providing more certainty to lenders that they will be able to access cheap cash from the central bank for a long time to come. Convinced of this, banks will reduce borrowing costs and lend more. And, with rates remaining lower for longer, savers will believe there is little point in holding cash and will go splurge. Read more

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Posted in Bank of England |

Claire Jones The debate on scrapping the inflation target

January 2, 2013 7:57 pm by Claire Jones

If Bank of England governor-designate Mark Carney was looking to spark debate, then his call for the UK to scrap its inflation target (should meaningful growth continue to elude the UK) has done the job.

The FT’s economics editor Chris Giles and economics correspondent Sarah O’Connor write in today’s paper that Mr Carney’s call has divided economists in this year’s FT poll.

Those in favour of sticking with the status quo — 45 per cent — outnumber those calling for a shift to a new regime — 35 per cent. (And not all of those in favour of a switch back Mr Carney’s calls for central banks to target nominal GDP instead.) But in previous years, support from more than a handful of economists for the scrapping of the inflation target would have been unthinkable.

Interestingly, support for change is stronger than average among those who have had to work with inflation targeting: of the ten former MPC members that took part in the poll, five want to do away with the current regime, with the rest in favour of keeping it. Read more

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Posted in Bank of England |
From FT.com December 11, 2012

Mark Carney. Getty Images

Mark Carney, the next governor of the Bank of England, has suggested he will act much more aggressively to revive the UK economy when he takes charge next summer, including dumping the BoE’s much-vaunted inflation target if growth fails to pick up.

In a clear break with the views of the BoE’s current senior management, Mr Carney, now governor of the Bank of Canada, said on Tuesday that central banks should consider more radical measures – such as commitments to keep rates on hold for an extended period of time and numerical targets for unemployment – when rates are near zero. Read more

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Posted in Bank of Canada, Bank of England |

Claire Jones Four things to expect from a Carney-led Bank of England

November 26, 2012 5:30 pm by Claire Jones

Mark Carney appointed as Sir Mervyn King's successor. Image by Getty

1. Mr Carney could introduce a commitment to keep rates on hold for an extended period of time.

Fed chairman Ben Bernanke was not the first to come up with the idea of making a commitment to keeping rates at ultra-low levels for a number of years, so long as inflation remained low. Mr Bernanke’s big idea was copied from Mr Carney’s Bank of Canada, which introduced a conditional commitment in April 2009 – two years before the Fed – with the aim of lowering longer-term interest rates.

2. Expect radical changes to the way in which the Bank operates.

Bringing in a foreigner to head your central bank is very rare – it signals that the government of the day believes there’s something deeply wrong. That Mr Carney has got the job signals the government is intent on root-and-branch reform of the Bank. Read more

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Posted in Bank of England |

Chris Giles BoE governor race is on

April 18, 2012 3:42 pm by Chris Giles
Mervyn King, Governor of the Bank of England

Mervyn King, Governor of the Bank of England

There is still more than 14 months to go before Sir Mervyn King leaves the Bank of England, but he is already in danger of appearing a lame duck as the race to succeed begins in earnest.

Today the FT reported that Mark Carney, the governor of the Bank of Canada, has been approached in relation to the job by a member of the Bank’s court, its governing body, having spoken to three people involved in the process. Mr Carney declined to comment. The Bank of Canada said the report was not accurate.

The FT also reported that the Treasury wants Charlie Bean, deputy governor for monetary policy, to remain in post after his term expires in June 2013 to provide some continuity as the top echelons of the Bank are rearranged. No one has denied this part of the story and Mr Bean has told colleagues he is willing to accept any offer to stay on for an interim period. So where do these events put the runners, the riders and those subtly touting themselves for the job. Read more

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Posted in Bank of England |

Claire Jones Central bankers in Davos

January 25, 2012 11:09 am by Claire Jones

Davos is not as important an event on the calendars of central bankers as the IMF/World Bank meetings or the Bank for International Settlements Annual General Meeting. Neither the Bank of England nor the Federal Reserve will be bothering to send anyone, for instance.

But there are still plenty of Davos men (and one woman) among the senior ranks of the profession. Read more

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Posted in Bank of Canada, Bank of England, Bank of Israel, Bank of Mexico, European Central Bank, Federal Reserve, Swiss National Bank |

Claire Jones The week ahead in central banking

January 20, 2012 6:27 pm by Claire Jones

Our week ahead email helps you track the most important events in central banking. To see all of our emails and alerts visit www.ft.com/nbe

FOMC meeting

The Federal Open Market Committee meets on Tuesday and Wednesday to set monetary policy for the coming month and a half.

The meeting – to be followed by one of chairman Ben Bernanke’s press conferences – could see the FOMC announce an inflation target. This from the FT’s US economics editor Robin Harding: Read more

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Posted in Bank of England, European Central Bank, Federal Reserve |

Claire Jones The week ahead in central banking

December 9, 2011 4:15 pm by Claire Jones

Our week ahead email helps you track the most important events in central banking. To see all of our emails and alerts visit www.ft.com/nbe

FOMC meeting

The highlight of next week’s calendar is Tuesday’s Federal Open Market Committee meeting.

Here’s the FT’s US economics editor Robin Harding on what to expect:  Read more

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Posted in Bank of Canada, Bank of England, Bank of Japan, European Central Bank, Swiss National Bank |

Claire Jones Regulation and sovereign debt: a vicious circle?

July 12, 2011 7:34 pm by Claire Jones

Regulators’ fondness for sovereign debt is looking odder by the day.

The eurozone crisis and the Congressional impasse over the US debt ceiling have put paid to any notion of government bonds as risk free. What’s more, a Committee on the Global Financial System paper suggests that encouraging banks to up their holdings might in fact do more to endanger stability than promote it.

The paper, published Monday, identifies a “vicious circle between the conditions of public finances and those of banks”. As banks’ funding costs worsen, so does the creditworthiness of the sovereign, which in turn heightens funding costs. If such a vicious circle does indeed exist, then incentivising banks to hold more sovereign debt in order to fulfil regulatory requirements would only compound the problem. Read more

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Posted in Bank for International Settlements |

Simone Baribeau Carney on eating Canadian asset cake

March 11, 2010 11:17 pm by Simone Baribeau

Mark Carney, Governor of the Bank of Canada, today spoke on Canada’s response to the financial crisis. In a question and answer period after the speech, Mr Carney said (via Reuters):

Our view is that the first line of defense of financial stability is regulation and we would underscore the experience with Canada, Australia, other major inflation targeters has been that you can have your cake and eat it too — you can have price stability, you can have financial stability if you get the regulatory side right.

As the governor of the central bank in the only country in the G7 that avoided bailing out its banks, Mr Carney has good reason to tout his country’s success. But what if the crisis has yet to pass? Read more

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Posted in Uncategorized |
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