LONDON, March 4 (Reuters) - The next governor of the Bank of England, Andrew Bailey, spoke to lawmakers in parliament on Wednesday. Below are highlights of his comments:
WHETHER THE BOE SHOULD CUT RATES BEFORE NEXT SCHEDULED DECISION ON MARCH 26:
“The Monetary Policy Committee hasn’t in its history tended to do that but there is nothing that in the constitution of the Monetary Policy Committee to stop that happening.”
“I think what we need frankly is more evidence than we have at the moment, as to exactly how this is feeding through. We have got a building picture of evidence. The Bank of England is ... working extremely hard on it. I have been engaged on it this week, and I think then we can reach our judgment.”
“When I look back at the financial crisis, and you use words like ‘nimble’ and ‘dexterous’, we had to do things in short order during that period which were pretty unprecedented, absolutely unprecedented in the history of certainly the bank and we had to do them at short notice.”
“I think it is quite reasonable to expect we are going to have to provide - collectively going to have to provide - some form of supply chain finance in the not very distant future now to ensure that the effects of this shock from the virus are not damaging to many forms of activity, and probabaly particularly to small and medium sized firms, and we are going to have to move very quickly to do that.
“I have to tell you that a lot of, yes, things, have happened during that period. Things have happened that I wish hadn’t happened ...”
“We’ve had a huge task on our hands, I have to tell you, in rebuilding the organisation to take on that challenge. I think it would have been better had it been done earlier, because I think it would have been fit to take that on earlier.”
Bailey was asked whether he had any specific regrets about his interaction with the committee on GRG, particularly in relation to transparency. He replied:
“I’ll put it rather starkly if you don’t mind. Please don’t ask us to break the law. We found a way through it and there was a way through it actually.
“Yes there was a difficult moment but I’m afraid that’s a point where I had to be robust and say as a public body we can’t break the law, there is a way round this, and it was done, but I’m afraid we had to stand our ground at that point.”
ON ADJUSTING THE BoE CORPORATE BOND PORTFOLIO FOR CLIMATE CONSIDERATIONS
“The question that you rightly raise is shall we shift that to say, given the public interest in climate change, we should shift the make-up of the portfolio to being one that is on the way to net neutral however you want to define it.
I think there is a very strong argument for doing that.
Actually the way this is governed we would have to agree that with the Treasury ... I intend to have that discussion with the Treasury because I think it’s a perfectly sensible thing to do.
“It will be a priority yes.”
ON WHETHER THERE SHOULD HAVE BEEN MORE RATE RISES IN RECENT YEARS
“I don’t think that would have been justified by the record of inflation frankly to do that, so I don’t think that would have been consistent with the framework in which we operate.”
Reporting by Sarah Young and Costas Pitas, editing by Stephen Addison