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Bank of England’s Carney agrees to open up over private Osborne talks

Bank of England’s Carney agrees to open up over private Osborne talks

LONDON: Bank of England Governor Mark Carney agreed on Tuesday to let a senior lawmaker view notes from meetings with finance minister George Osborne to allay concerns about central bank bias in the run-up to last month’s European Union referendum.

The Bank of England forecast the currency would tumble and the economy would slow sharply if the country voted to leave – which Osborne trumpeted as independent backing of the government’s ultimately unsuccessful bid to keep Britain in the EU.

Carney, in a regular appearance before a cross-party committee of lawmakers on Tuesday, defended the central bank’s stance as an objective, non-partisan assessment of economic risks facing the country which it was legally required to give.

But under pressure from Conservative committee chairman Andrew Tyrie, Carney said he would try to find a way to let the committee see any notes government officials had made during meetings he had with Osborne in recent months.

“I would be very wary about establishing a precedent which limited free-flowing discussion between future governors (and) future chancellors,” Carney said.

“I think if we can create a process which relies on the discretion of you as chair and the committee, so we are not putting things into the public domain which can be immediately commercially sensitive,” he continued, before Tyrie interrupted him to suggest discussing the practicalities later.

“We will do that,” Carney replied.

Tyrie – who supported Britain staying in the EU – has been keen in the past to expand his committee’s oversight of the BoE, which has a wider remit over monetary policy and financial regulation than other major central banks.

British finance ministers and central bank chiefs talk regularly when there are issues to discuss, but these meetings are rarely made public, and the central bank has independence over decisions on interest rates and regulation.

Osborne went to significant lengths to court Carney to give up his job as governor of the Bank of Canada and take the same role in Britain. By contrast, finance ministers Alistair Darling and Gordon Brown’s relationships with previous governors Mervyn King and Eddie George were not always warm.

Carney earlier rejected the allegation from some Leave campaigners – put to him by Tyrie – that he and Osborne had conspired to ensure BoE policy committees which Carney chaired delivered an unfavourable verdict on Brexit.

“I did not prejudge the line of those policy committees, nor could I. That’s not the way the system works, that is not the way the system is set up,” Carney said.

Two independent members of the BoE’s Financial Policy Committee – Richard Sharp and Donald Kohn – told the lawmakers Carney had not tried to manipulate their discussions.

Copyright Reuters, 2016

Courtesy : BRecorder



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