Andrew Bailey will have the UK bond market’s back 7 May 2020 The Bank of England boss expects a big drop in GDP this year. His asset purchases have pushed down gilt yields despite surging public debt issuance. Investors can count on Bailey to ramp up the buying programme given how long the economy will take to recover from the virus.
Central bankers have more cards up their sleeves 29 Apr 2020 Fed Chair Jay Powell and his peers have fashioned new tools to fight the Covid-19 crisis. In future downturns, they could copy the BOJ’s stock buying and, in extremis, consider financing governments directly. Only surging inflation or overt political meddling will hold them back.
Bank of England deploys old tools for new problem 19 Mar 2020 New boss Andrew Bailey has cut UK interest rates to 0.1% and ramped up bond buying. Among the reasons for the easing is a deterioration in the government debt market that is leading to a tightening of financial conditions. Even massive asset purchases may not fix that headache.
Central bank largesse is mixed bag for EU lenders 13 Mar 2020 Christine Lagarde and Mark Carney are giving banks free money and capital relief to fight a virus-induced slump. Investors will see few benefits, though. Higher dividends are taboo, and cheap funds will finance lower-cost loans. Balance sheets have become a social safety net.
Bank of England’s AI approach will toughen up 21 Feb 2020 UK finance has yet to face many restrictions on using artificial intelligence. But the technology brings risks as well as opportunities, the BoE’s fintech director told Breakingviews. A light-touch approach will change as machines make increasingly important financial decisions.
Mark Carney’s green push needs disclosure stick 14 Feb 2020 The outgoing Bank of England boss wants firms to say how they’ll cut carbon emissions. Ideally, he would use his new role as U.N. climate finance envoy to make such disclosure mandatory after November’s UK climate summit. But there’s only so much political capital to go round.
Onus is on banks to get rid of Libor 6 Feb 2020 UK lenders are linking most new sterling loans to the old interest rate benchmark despite a September 2020 deadline to switch to its successor. But the transition will speed up now that IT systems are finally ready. Regulatory pressure leaves Barclays, HSBC and Lloyds no choice.
Carney’s BoE legacy is bigger than monetary policy 30 Jan 2020 Outgoing Bank of England boss Mark Carney has ably navigated choppy economic and political waters since 2013. Early attempts to use rhetoric to steer markets went awry, but his big success was shining an early light on the risks that climate change poses to the financial sector.
Mark Carney has reason to ease before he leaves 13 Jan 2020 The UK economy grew at its slowest annual pace since 2012 in November. The Bank of England boss has one more policy meeting left before Andrew Bailey takes over. Catching up with recent easing by the U.S. Federal Reserve and European Central Bank would be the best handover gift.
New BoE boss is only partly the safe choice 20 Dec 2019 Andrew Bailey is the next governor of the Bank of England. His CV is more complete than internal rivals, and Brexit arguably means the role needs an unflashy Brit more than a carbon copy of Canadian incumbent Mark Carney. But Bailey will need to prove that his BoE is independent.
Audio feed goof makes BoE look naive – and stingy 19 Dec 2019 Traders got faster access to Bank of England briefings by paying the contractor responsible for internal broadcasts. The BoE should have better monitored what was happening. But the problem could have been avoided altogether had it invested in overhauling its two-speed system.
Brexit makes Carney less of a central bank oddity 1 Aug 2019 Bank of England boss Mark Carney is, like everyone, in the dark about whether Britain will crash out of the EU. Without that uncertainty, he might be tightening policy when peers are either easing or hinting they might. Being odd man out would be better than the current limbo.
Boris Johnson may spice up UK central bank race 24 Jun 2019 The frontrunner to succeed Prime Minister Theresa May tends to stray from the script. That increases the chances of an unconventional candidate replacing Mark Carney as the head of the Bank of England. If Johnson makes the pick, it could even be his most lasting legacy.
UK banks’ Brexit flak jackets look durable 12 Mar 2019 The Bank of England has told some lenders to triple their liquid assets in case of a hard Brexit, according to the FT. Lenders have quadrupled their easy-to-sell securities to 1 trillion pounds over a decade. Standby central bank funds provide extra armour in a no-deal scenario.
Central banks’ gold fever is anything but reckless 5 Feb 2019 Their 2018 purchases of the yellow metal were the second-highest on record and up nearly three-quarters from a year ago. But this isn’t a speculative punt on prices rising. Instead, it’s a logical precaution against rival currencies and U.S. self-harm eroding dollar dominance.
New global bank cop faces political stress test 26 Nov 2018 Fed Vice Chair Randal Quarles is a strong choice to lead the Financial Stability Board but the Basel-based body faces many challenges. A divided U.S. Congress is fighting about whether to be tough or soft on Wall Street. Brexit and other forces will also test cross-border unity.
Breakdown: Libor habit is hard and costly to kick 23 Oct 2018 Over $300 trillion of financial contracts are linked to discredited benchmark interest rates. Switching to new ones could disrupt economies as well as markets. It will take a lot of money, time, and willingness to reconcile conflicting interests to avoid bad withdrawal symptoms.
Britain is making a mess of replacing Mark Carney 3 Sep 2018 The Bank of England boss may extend his term for a second time, keeping him at the central bank beyond June 2019. That could offer comfort to investors worried about Brexit. But it would suggest the government is struggling to find a good successor. That’s a bad signal to send.
Derivatives spat is bad omen for UK-EU regulation 27 Jun 2018 The Bank of England wants European authorities to provide assurance that contracts worth 100 trillion pounds will be valid after Brexit. The EU’s watchdog says banks must prepare for the worst. Playing politics with financial stability bodes ill for future regulatory cooperation.
BoE wrangle reflects rate setters’ identity crisis 22 Jun 2018 The opposition Labour party wants the Bank of England to include productivity targets in its mandate. The idea seems flawed - monetary policy is a weak tool for boosting efficiency. But it reflects a growing political dissatisfaction with independent yet impotent central banks.