Governor Talks - United Kingdom: Price Stability and Financial Stability in an Uncertain World

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Location: Cedar Hall, HQ1-1-660

 

SPEAKER

 

   
Andrew Bailey
Governor, Bank of England

On 20 December 2019, Andrew Bailey was announced as the new Governor of the Bank of England. He began his term on 16 March 2020. Andrew Bailey served as Chief Executive Officer of the Financial Conduct Authority (FCA) from 1 July 2016 until taking up the role of Governor. As CEO of the FCA, Andrew Bailey was also a member of the Prudential Regulation Committee, the Financial Policy Committee, and the Board of the Financial Conduct Authority.

Andrew previously held the role of Deputy Governor, Prudential Regulation and CEO of the PRA from 1 April 2013. While retaining his role as Executive Director of the Bank, Andrew joined the Financial Services Authority in April 2011 as Deputy Head of the Prudential Business Unit and Director of UK Banks and Building Societies. In July 2012, Andrew became Managing Director of the Prudential Business Unit, with responsibility for the prudential supervision of banks, investment banks and insurance companies. Andrew was appointed as a voting member of the interim Financial Policy Committee at its June 2012 meeting. Previously, Andrew worked at the Bank in a number of areas, most recently as Executive Director for Banking Services and Chief Cashier, as well as Head of the Bank's Special Resolution Unit (SRU). Previous roles include Governor's Private Secretary, and Head of the International Economic Analysis Division in Monetary Analysis.

 

MODERATOR

 

   
Alfred Kammer
Director of the European Department (IMF)

Alfred Kammer is the Director of the European Department at the International Monetary Fund since August 2020. In this capacity, he oversees the IMF’s work with Europe. Mr. Kammer was previously the Chief of Staff of the Office of the Managing Director, advising the Managing Director on strategic and operational issues and overseeing operations for the senior management team; Deputy Director of the Strategy, Policy and Review Department, overseeing the work on Fund strategy and surveillance policy; Deputy Director of the Middle East and Central Asia Department, overseeing regional economic developments and financial sector issues; Director of the Office of Technical Assistance Management, advising management on technical assistance operations and overseeing fundraising and global partnerships for capacity building; and Advisor to the Deputy Managing Director. Mr. Kammer also served as resident representative of the IMF in Russia. Since joining the IMF, Mr. Kammer worked with countries in Africa, Asia, Europe, and the Middle East, and on a wide range of policy and strategic issues.

 

SUMMARY

 

Key Points:

  • Interaction between price and financial stability. The institutional structures put in place after the global financial crisis—monetary policy, macroprudential, and microprudential structures—are being tested now. Although financial conditions are always taken into consideration when setting monetary policy, the inflation target should remain the primary concern. Macroprudential policy tools can be used to address financial stability concerns. The focus should be on how to align the various pieces of policymaking.
  • Financial sector resilience post-2008. The financial system is more robust and endowed with a larger toolkit to deal with stress than it was prior to the global financial crisis. Banks now have higher liquidity buffers and the “steady-state” of reserves in the system is higher than it was pre-crisis. Central banks should provide clear communication strategies to provide fact-based reassurance.
  • Non-Bank Financial Institutions (NBFIs). The agenda of central banks on NBFIs is important and should not be sidelined by issues in the banking sector. The challenges with NBFIs stem from the fact that they are now bigger than what they were in 2008, they are heterogeneous, and problems in small pockets of the sector have the ability to spread.

Quotes:

I do not see evidence that we’ve got on our hands the makings of the 2007-2008 financial crisis; the system is in a much more robust condition; we have got a lot more tools in our armory to deal with these issues than we had in 2007-2008.Andrew Bailey (11.09)

We always have to be focused on how we bring the various pieces of policymaking into alignment, so they work together.Andrew Bailey (4.18)

Contributor: Najla Nakhl

 

PHOTOS