This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/live/2016/jul/05/mark-carney-to-outline-bank-of-englands-brexit-stability-moves-business-live
The article has changed 19 times. There is an RSS feed of changes available.
Version 1 | Version 2 |
---|---|
Mark Carney eases bank lending rules to fight Brexit crisis as pound hits 31-year low - live updates | Mark Carney eases bank lending rules to fight Brexit crisis as pound hits 31-year low - live updates |
(35 minutes later) | |
11.53am BST | |
11:53 | |
Government meeting with major banks about Brexit risks today | |
UK chancellor George Osborne has welcomed the BoE’s decision to ease bank capital rules. | |
Important move by @bankofengland using tools I gave them to reduce banks' capital requirements to boost lending capacity by up to £150bn | |
He also reveals that major bank bosses are heading to his offices this morning, to discuss the crisis | |
Meeting major banks in Downing Street shortly to discuss response to referendum result. We need great national effort to steer UK through | |
11.51am BST | |
11:51 | |
The decision to cut the counter-cyclical capital buffers is one of several Brexit u-turns, tweets The Sun’s political editor: | |
So; banks' capital reserves to be spent, deficit to go back up, AAA credit rating lost. Six years of economics reversed in 12 days #Brexit | |
Hang on, though, didn’t The Sun back Brexit??!! | |
Updated | |
at 11.52am BST | |
11.48am BST | |
11:48 | |
Structure of property investment funds may need to be reconsidered following Standard Life suspension says FCA head Andrew Bailey | |
11.43am BST | |
11:43 | |
Some key points from Mark Carney’s briefing: | |
Carney quite rightly focussing on liquidity support to underline confidence. Correctly anticipating further pressure | |
Carney says 2014 stress tests shows banks are resilient: system is there for anyone who wants to buy a house | |
Carney advises consumers to be prudent post Brexit - just as he would if the UK was in the 10th year of a boom | |
#Carney: the law is the law, the rules are the rules, the system is the system. ie keep on keepin' on. | |
11.41am BST | |
11:41 | |
Q: Does the Bank of England actually have the capacity to handle Britain’s exit from the EU? | |
Mark Carney insists that yes, the BoE has the staff capacity to cope once Article 50 is triggered. | |
But until that actually happens, the financial rules do not change. | |
11.39am BST | |
11:39 | |
City watchdog in 'very close touch' with real estate firms | |
Q: How worried is the Bank about Standard Life’s decision to lock down its property fund last night? (to prevent investors bailing out) | |
Andrew Bailey, the next head of the FCA (the city watchdog), says Standard Life has taken a ‘sensible move’ to suspend redemptions. | |
It prevents a stampede of money out of property funds while the underlying assets are revalued (which can take time). It would be wrong for investors at the front of the queue to get their money back, while those at the back lose out, Bailey says. | |
The FCA is also in “very close touch” with firms in the sector, he reveals. | |
Related: Standard Life shuts property fund amid rush of Brexit withdrawals | |
11.36am BST | |
11:36 | |
Q: How low could the Bank of England cut interest rates (they’re currently 0.5%)? | |
Carney declines to speculate much, as the Monetary Policy Committee is due to take a decision next week. | |
Any measure to stimulate the economy must be well-aimed and focus on the domestic economy. | |
We must also consider ‘unintended consequences’, he adds. [ultra-low interest rates make it hard for banks to achieve profitability, for example] | |
11.34am BST | |
11:34 | |
Q: What impact will the slump in the pound have on the UK economy? | |
Mark Carney says that it should help with Britain’s current account deficit (reminder, it’s worryingly high) | |
Updated | |
at 11.34am BST | |
11.32am BST | |
11:32 | |
Carney's message to Britain: Be prudent | |
Q: What is your advice to people who are wondering about taking out a loan or mortgage? | |
We are advising people to be prudent, governor Carney smiles. | |
If you are taking out a mortgage, at some stage, during the life of that mortgage, conditions will be difficult. | |
So you want to be sure, as a household or an individual, that you can repay that mortgage - you don’t want to lose your house or flat. | |
But this is classic central bank advice, he adds. We’d tell you to be prudent if we were in the 10th year of a boom. | |
11.29am BST | |
11:29 | |
Carney says the Bank wants to avoid a repeat of the 2007-2008 conditions, when it was out of question to seek credit. | |
Banks can be part of the solution not the problem says Mark Carney as banks have more capital than they need | |
11.28am BST | |
11:28 | |
Q: Do you regret allowing banks to pay dividends in the run-up to June’s referendum? | |
Mark Carney insists that UK banks are financially stable. | |
Q: How many UK households are vulnerable to an economic slowdown? | |
Carney flips this question to deputy governor Jon Cunliffe. | |
Cunliffe says the Bank are watching the ‘cohort’ of vulnerable households closely. | |
Households who are highly indebted tend to cut their consumption drastically, when hit by an interest rate shock or earnings shock, Cunliffe says. | |
But the Bank did restrict the availability of high loan-to-value mortgages in 2014, to limit the number of highly vulnerable households, he adds. | |
11.23am BST | |
11:23 | |
Q: Is the Bank worried about a crash in the buy-to-let market? | |
Carney says the Bank is watching the buy-to-let sector carefully. | |
He points out that the bank included a housing crash in its latest Stress Tests -- and the current environment is not a serious as modelled in those tests. | |
The core of the UK financial system is very strong, and it will be there for home-buyers and businesses, he insists. | |
11.19am BST | 11.19am BST |
11:19 | 11:19 |
Carney: UK more risk averse after Brexit vote | |
Q: Is the Bank seeing signs of a slowdown in credit demand? | Q: Is the Bank seeing signs of a slowdown in credit demand? |
Carney says this is a crucial point -- the credit market will be driven by demand, not supply. | Carney says this is a crucial point -- the credit market will be driven by demand, not supply. |
We are seeing signs that the environment is becoming more ‘risk averse’, he says. And that’s why the Bank has decided to relax credit rules, to encourage banks to lend. | We are seeing signs that the environment is becoming more ‘risk averse’, he says. And that’s why the Bank has decided to relax credit rules, to encourage banks to lend. |
But demand for credit will be governed by the level of uncertainty over Britain’s future, and its relationship with the EU. | But demand for credit will be governed by the level of uncertainty over Britain’s future, and its relationship with the EU. |
UK is in a much more risk adverse environment says Carney | |
Updated | |
at 11.24am BST | |
11.17am BST | 11.17am BST |
11:17 | 11:17 |
Q: The Monetary Policy Committee warned that Britain might fall into recession after a Brexit vote, but might the fall in the pound actually be a stimulus? | Q: The Monetary Policy Committee warned that Britain might fall into recession after a Brexit vote, but might the fall in the pound actually be a stimulus? |
Carney replies that there is “growing evidence” that the economy was slowing, even before the referendum. | Carney replies that there is “growing evidence” that the economy was slowing, even before the referendum. |
And it is probably experiencing a “material slowing”, despite the foreign exchange moves. | And it is probably experiencing a “material slowing”, despite the foreign exchange moves. |