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You can find the current article at its original source at https://www.theguardian.com/politics/live/2016/jul/12/mps-to-quiz-mark-carney-on-brexit-fallout-business-live
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MPs quiz Mark Carney on Brexit fallout - business live | MPs quiz Mark Carney on Brexit fallout - business live |
(35 minutes later) | |
11.46am BST | |
11:46 | |
Carney: we have tools to meet stability | |
Carney is talking about the ultra low rates environment we are currently in. The governor suggests that the Bank still has tools up its sleeve should it need them. | |
We have the tools to meet our responsibilities for both monetary and financial stability. | |
Carney continues to sound the same reassuring note he has adopted since the Brexit result was known on 24 June. | |
Economists believe the Bank’s Monetary Policy Committee will announce fresh measures to stimulate the UK economy - possibly as early as Thursday when it announces its monthly policy decision. | |
The MPC could further cut interest rates (from 0.5%) or extend quantitative easing (from £375bn), or both. | |
11.36am BST | |
11:36 | |
FPC member Donald Kohn says the most likely scenario of a rise in UK interest rates is a strong economy. “It doesn’t necessarily have to be all bad news.” | |
11.31am BST | |
11:31 | |
Sir Jon Cunliffe, the Bank’s deputy governor for financial stability, says we have seen the beginning of financial markets putting a risk premium on UK assets. | |
However, his FPC colleague Donald Kohn says this is limited, because the banks are better capitalised than they were in the run-up to the financial crisis. | |
11.22am BST | |
11:22 | |
Carney says consumers are in a better position than they were in the run-up the crisis, less indebted. | |
So households indebtedness now poses a smaller risk to financial stability. | |
Updated | |
at 11.36am BST | |
11.18am BST | |
11:18 | |
Labour’s Mann asks the governor how the Bank might deal with the short term risks posed by a potential second referendum on Scottish independence. | |
He says the issue of UK bank headquarters should be addressed well before any future decision on independence. | |
Updated | |
at 11.36am BST | |
11.15am BST | |
11:15 | |
Now to Italian banks. Carney says there is a macroeconomic risk posed by Italian banks and their bad loans and the Italian authorities are looking at it. | |
The UK’s exposure is “modest,” the governor says. | |
11.10am BST | 11.10am BST |
11:10 | 11:10 |
Labour MP John Mann is bringing Carney to task on property funds, and the fact the FPC was aware that investors were likely to withdraw large sums of money in the event of a Brexit vote. | Labour MP John Mann is bringing Carney to task on property funds, and the fact the FPC was aware that investors were likely to withdraw large sums of money in the event of a Brexit vote. |
Why didn’t the FPC do anything? | Why didn’t the FPC do anything? |
Carney says that markets have created funds with daily liquidity that invest in illiquid assets (i.e. property). He says the FCA were aware and were looking at the issue. | Carney says that markets have created funds with daily liquidity that invest in illiquid assets (i.e. property). He says the FCA were aware and were looking at the issue. |
11.04am BST | 11.04am BST |
11:04 | 11:04 |
Tyrie now asks Donald Kohn about a Republican party report in the US that claims the Department of Justice did not want to see legal proceedings against the HSBC because of risks to financial stability. | Tyrie now asks Donald Kohn about a Republican party report in the US that claims the Department of Justice did not want to see legal proceedings against the HSBC because of risks to financial stability. |
Should we be taking this seriously? | Should we be taking this seriously? |
Kohn says he has no specific knowledge of this situation. | Kohn says he has no specific knowledge of this situation. |
I wouldn’t pass judgment until I heard the other side of the story. | I wouldn’t pass judgment until I heard the other side of the story. |
Tyrie to Carney: “Did you discuss the matter with the chancellor? The allegation here is that UK authorities have been meddling.” | Tyrie to Carney: “Did you discuss the matter with the chancellor? The allegation here is that UK authorities have been meddling.” |
Carney says he was not involved in or aware of any alleged intervention on the HSBC case. | Carney says he was not involved in or aware of any alleged intervention on the HSBC case. |
(A reminder of the HSBC files here.) | (A reminder of the HSBC files here.) |
10.56am BST | 10.56am BST |
10:56 | 10:56 |
Carney: relaxing capital requirements is no silver bullet | Carney: relaxing capital requirements is no silver bullet |
There will be no “credit crunch”, unlike 2008/2009, according to the governor, because banks will have funds available to lend. Credit supply (lack of it) will not constrain the economy. | There will be no “credit crunch”, unlike 2008/2009, according to the governor, because banks will have funds available to lend. Credit supply (lack of it) will not constrain the economy. |
Reeves says she worries that the relaxing of rules on bank’s capital requirements are not going to be enough to save the economy post-Brexit. | Reeves says she worries that the relaxing of rules on bank’s capital requirements are not going to be enough to save the economy post-Brexit. |
Carney says it’s just one element of a bigger story: | Carney says it’s just one element of a bigger story: |
We would not represent this as a single silver bullet. It is part of a series of measures. | We would not represent this as a single silver bullet. It is part of a series of measures. |
10.46am BST | 10.46am BST |
10:46 | 10:46 |
Reeves says she is still worried about whether there will be a reduction in lending. | Reeves says she is still worried about whether there will be a reduction in lending. |
Carney says that demand, not credit availability, is more likely to wane. | Carney says that demand, not credit availability, is more likely to wane. |
We really want to make it as clear as possible to businesses and individuals that credit should be available for the right ideas, for the right transactions, be it a mortgage or a new business. | We really want to make it as clear as possible to businesses and individuals that credit should be available for the right ideas, for the right transactions, be it a mortgage or a new business. |
Updated | Updated |
at 10.50am BST | at 10.50am BST |
10.41am BST | 10.41am BST |
10:41 | 10:41 |
Rachel Reeves, Labour MP, says the Bank was right to warn on Brexit risks before she moves on to the issue of counter-cyclical buffers. | Rachel Reeves, Labour MP, says the Bank was right to warn on Brexit risks before she moves on to the issue of counter-cyclical buffers. |
Carney says that by relaxing the rules for banks he wanted to “take off the table” concerns about credit supply. “The banks are well capitalised.” | Carney says that by relaxing the rules for banks he wanted to “take off the table” concerns about credit supply. “The banks are well capitalised.” |
Updated | Updated |
at 10.48am BST | at 10.48am BST |