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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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| Version 6 | Version 7 |
|---|---|
| MPs quiz Mark Carney on Brexit fallout - business live | MPs quiz Mark Carney on Brexit fallout - business live |
| (35 minutes later) | |
| 12.23pm BST | |
| 12:23 | |
| Carney turns to the fall in the pound since the referendum. | |
| The exchange rate move can help the UK adjust to the post-Brexit environment, including the change in trade terms that will follow, the governor says. | |
| FPC member Donald Kohn says that if you are going to make a major decision to build a factory or open a new office in the UK, you would want to know what the terms of trading would be with other countries. | |
| 12.15pm BST | |
| 12:15 | |
| Andrew Tyrie follows up by saying the Bank’s MPC and FPC would have come in for considerable criticism had they not commented on the potential consequences of Brexit in the run up to the referendum. | |
| Deputy governor Cunliffe says the Bank’s reputation would have been damaged if it had not warned of Brexit risks before the vote. | |
| 12.10pm BST | |
| 12:10 | |
| Conservative MP Jacob Rees-Mogg is up. He clashed with Carney in the run-up to the referendum, accusing the governor of being in the pocket of the chancellor on the remain side of the campaign. | |
| Rees-Mogg asks whether the Bank must be like Caesar’s wife, “above suspicion”? | |
| The MP is pressing on with the idea that Carney showed political bias in the run-up to the referendum by arguing that being a member of the EU would be net beneficial for the UK economy. Carney rejects the idea. | |
| The Conservative MP is now taking Carney to task on his comment pre-referendum that UK rates could go either up or down in the event of a Brexit vote. | |
| Was it ever likely that policy would be tightened, Rees-Mogg asks, or did it just suit the chancellor’s argument? Carney says the statement was a balanced view, reflecting the views of the MPC as a whole. | |
| The governor is keeping a fairly cool head in the face of some hostile questioning by Rees-Mogg. | |
| Carney gets the last word, suggesting those questioning whether the Bank was biased “should consider their [own] motivations?” | |
| Updated | |
| at 12.10pm BST | |
| 11.51am BST | |
| 11:51 | |
| Markets are hedging “downside risk” according to Carney, which is why we have seen record low bond yields. | |
| Low bond yields do not give an accurate signal of the future of the UK economy. “The financial system can withstand huge shocks. There will be growth”. | |
| 11.46am BST | 11.46am BST |
| 11:46 | 11:46 |
| Carney: we have tools to meet stability | 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. | 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. | 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. | 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. | 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. | The MPC could further cut interest rates (from 0.5%) or extend quantitative easing (from £375bn), or both. |
| 11.36am BST | 11.36am BST |
| 11:36 | 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.” | 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 | 11.31am BST |
| 11:31 | 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. | 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. | 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 | 11.22am BST |
| 11:22 | 11:22 |
| Carney says consumers are in a better position than they were in the run-up the crisis, less indebted. | 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. | So households indebtedness now poses a smaller risk to financial stability. |
| Updated | Updated |
| at 11.36am BST | at 11.36am BST |
| 11.18am BST | 11.18am BST |
| 11:18 | 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. | 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. | He says the issue of UK bank headquarters should be addressed well before any future decision on independence. |
| Updated | Updated |
| at 11.36am BST | at 11.36am BST |
| 11.15am BST | 11.15am BST |
| 11:15 | 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. | 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. | 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 |