At­tacks on Cen­tral bankers are ‘mas­sive’ blame game: Car­ney

Kuwait Times - - BUSINESS -

Bank of Eng­land Gover­nor Mark Car­ney said yes­ter­day that ver­bal at­tacks by politi­cians on cen­tral banks, such as crit­i­cism by US Pres­i­dent-elect Don­ald Trump of the US Fed­eral Re­serve, were a “mas­sive blame-de­flec­tion ex­er­cise”.

Car­ney has faced po­lit­i­cal crit­i­cism in Bri­tain for the BoE’s low in­ter­est rates while Trump, dur­ing the US pres­i­den­tial elec­tion cam­paign, ac­cused the Fed­eral Re­serve of keep­ing rates low due to pres­sure from the Obama ad­min­is­tra­tion. “The Pres­i­dent-elect has voiced some views on the Fed and the stance of mon­e­tary pol­icy,” Car­ney said in re­sponse to ques­tions from law­mak­ers in par­lia­ment.

Car­ney said it was “very im­por­tant” to ex­plain that the causes of ul­tra-low in­ter­est rates in rich coun­tries went far be­yond de­ci­sions made by cen­tral bankers .”An ex­ces­sive fo­cus on mon­e­tary pol­icy in many re­spects is a mas­sive blame de­flec­tion ex­er­cise,” he said.

Car­ney has pre­vi­ously said in­ter­est rates are low be­cause they re­flect weaker de­mand and in­vest­ment, a trend that has been de­vel­op­ing since the 1980s due to fac­tors such as the im­pact of tech­nol­ogy and age­ing pop­u­la­tions. The BoE cut in­ter­est rates to a record low of 0.25 per­cent in Au­gust to help the Bri­tish econ­omy cope with the im­pact of the de­ci­sion by vot­ers to leave the Euro­pean Union in June.

Also yes­ter­day, Car­ney said he would not con­sider a fur­ther ex­ten­sion of his time in charge of the Bri­tish cen­tral bank, which is now due to end in June 2019. “I will leave June 30, 2019,” Car­ney said in re­sponse to a ques­tion dur­ing a reg­u­lar meet­ing with law­mak­ers in par­lia­ment.

The Cana­dian said on Oct. 31 that he will stay in his job for an ex­tra year to help smooth Bri­tain’s de­par­ture from the EU, but he will de­part two years short of a full term.

Car­ney came un­der heavy crit­i­cism from pro-Brexit politi­cians for warn­ing be­fore June’s EU mem­ber­ship ref­er­en­dum of the eco­nomic risks of vot­ing to leave the bloc.

Some Bri­tish me­dia have spec­u­lated that Car­ney might stay on be­yond June 2019 if the govern­ment fails to con­clude its exit from the EU by that date. Car­ney said his de­ci­sion to ex­tend his time at the BoE by only one year had noth­ing to do with com­ments made by Bri­tish Prime Min­is­ter Theresa May who in Oc­to­ber crit­i­cized the “bad side ef­fects” of low in­ter­est rates. — Reuters

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