Mark Carney shifts away from Mervyn King with bank support plan
The Bank of England Governor, Mark Carney, last night unveiled an overhaul of the way the Bank provides cash to troubled lenders, while expressing his strong support for the City as a hub of global finance.
Mr Carney said the new liquidity framework reflected lessons learned from the financial crisis, when the Bank was criticised for being too slow to support crisis-hit lenders.
The Canadian promised that, in a new financial emergency, the Bank would lend to private banks against a wider range of collateral, rather than insisting on the best quality assets as before. He added that the Bank would lend funds for longer and that its facilities would be cheaper. Combined, policymakers hope these measures will make banks more willing to lend to those wanting to borrow.
"Five simple words describe our approach: we are open for business" Mr Carney said. He added that the new framework was "not ornamental" but was designed in the full expectation that struggling banks would in future avail themselves of the backstop lending.
And in a move likely to be interpreted as a departure from the approach of his predecessor, Lord King, who persistently warned against banks that are "too big to fail", Mr Carney said that the issue was safety, not size. "It is not for the Bank of England to decide how big the financial sector should be" he said. "Our job is to ensure that it is safe".
Mr Carney also warned that global "financial fragmentation" since the since the crisis of five years ago was holding back growth and undermining living standards. "Cross-border capital flows have fallen sharply since the crisis. Multilateral trade liberalisation has stalled, to the detriment of global prosperity" he said.
- 1 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 2 Have sex with your iPad thanks to the new sex toy no-one asked for
- 3 The 'sex selfie stick' lets you FaceTime the inside of a vagina
- 4 Adam Levine's biggest fan had a panic attack upon meeting him, so the singer laid down on the floor to get a photo with him
- 5 Why you're almost certainly more like your father than your mother
Out-of-touch MPs ‘don’t get it’, says ex-Civil Service chief
Mark Zuckerberg: Facebook CEO's one simple test for who to hire
Bali nine: Welcome to 'Execution Island' – the Indonesian holiday resort where foreigners are sent to die
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
iJobs Money & Business
£8 per hour: Recruitment Genius: This Pension Specialist was established early...
£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
Voluntary post, reasonable expenses reimbursed: Reach Volunteering: Would you ...