Browse content similar to Mark Carney - Governor of Canada's Central Bank. Check below for episodes and series from the same categories and more!
Line | From | To | |
---|---|---|---|
be here at six. Now on BBC News financial | :00:13. | :00:17. | |
financial centre has been tarnished again. This time another British | :00:18. | :00:22. | |
bank, Standard Chartered, stand accused of irregularities will stop | :00:22. | :00:27. | |
New York's top financial regulator claims the bank carried out $250 | :00:28. | :00:32. | |
billion of illegal transactions with Iran over the last decade. The | :00:32. | :00:37. | |
Bight refutes these claims. The latest case follows that like other | :00:37. | :00:41. | |
scandals in London. Moves are underway to tighten banking | :00:41. | :00:48. | |
regulation. Where does this problem like? We speak to date with Mark | :00:48. | :00:53. | |
Carney, in charge of steering the new rules will banking as chairman | :00:53. | :00:57. | |
of the Financial stability Board for the G20 Leading economies. He | :00:57. | :01:07. | |
:01:07. | :01:30. | ||
is the governor of Canada's Central Welcome. He it's a pleasure. He is | :01:30. | :01:38. | |
the reputation of London shock? it's not shock. It has taken some | :01:38. | :01:42. | |
hits there is no question. It's important to distinguish these | :01:42. | :01:47. | |
events and what's being done in into being used. The UK government | :01:47. | :01:52. | |
and regulators is at the forefront of implementing and used it of | :01:52. | :01:56. | |
regulations will does on these. They were putting these in place. | :01:56. | :02:03. | |
Part of what we see is the aftermath of a dark period in | :02:03. | :02:06. | |
London's financial history. looking at the allegations around | :02:06. | :02:15. | |
Standard Chartered, walk about transactions with Iran, taking | :02:15. | :02:21. | |
place over last Ten News, the financial scandal happen in 2008. | :02:21. | :02:25. | |
Why does these things to carry on her that you were on bills?, | :02:25. | :02:30. | |
ultimately that's the question for the institution and the American | :02:30. | :02:34. | |
regulators that's money these allegations as yet unproven. The | :02:34. | :02:39. | |
other point is that all institutions had to tonight and | :02:39. | :02:45. | |
their awareness of what's happening. These are complex banks. They do | :02:45. | :02:50. | |
with a range of countries and transactions. Executives need to be | :02:50. | :02:57. | |
on top of that. APEC cannot be on top of that money to Should beer | :02:57. | :03:02. | |
business activities. Look at pictures BC being fined for money | :03:02. | :03:07. | |
laundering to Mexico and Barclays Bank be cause of the rigging the | :03:07. | :03:17. | |
:03:17. | :03:19. | ||
LIBOR. We rode traders at JP Morgan Chase. We have obviously these | :03:19. | :03:24. | |
things need to be investigated. Standard Chartered has refuted | :03:24. | :03:29. | |
these clubs. There are others in the UK like the Labour MP in House | :03:29. | :03:36. | |
of Commons who suspects this is Washington trying to win at a | :03:36. | :03:41. | |
commercial battle trying to change the trade from London to New York. | :03:41. | :03:44. | |
Do you think they're trying to exploit these scandals? What's | :03:44. | :03:51. | |
important is that all, two centres, Major, ninja and cinders, small of | :03:51. | :03:56. | |
phonic centres such as Canada or other countries, they need to have | :03:57. | :04:01. | |
confidence in each other. That confidence comes from implementing | :04:01. | :04:07. | |
reforms. Minute to fix the problems in its current action and be open | :04:07. | :04:12. | |
with each other and one thing we are doing in the Financial | :04:12. | :04:17. | |
Stability Board is just designing the rules but also auditing and | :04:17. | :04:23. | |
trees will be UK it cannot touch. We see what the current momentum | :04:23. | :04:27. | |
these rules and its patent, we go to the top, the meat is the G-20, | :04:27. | :04:31. | |
the media and the general public and we will let you know who is on | :04:31. | :04:38. | |
track and who is behind. You're the chairman of the Financial Stability | :04:38. | :04:43. | |
Board the G-20. That was set up to bring up her rib youthful | :04:43. | :04:46. | |
resistance across the G20 and co- ordinate action on an international | :04:47. | :04:50. | |
level will stop we're seeing some backsliding. Will you no aim no | :04:50. | :04:58. | |
Aymes? That's interesting the stock or reforms that had been done on | :04:58. | :05:05. | |
the capital to increase the at the banks called rorted to Ian Cohen | :05:05. | :05:10. | |
score so at the robust, they make a small mistake but one problem in | :05:10. | :05:14. | |
this crisis about the links is that it in the use of capital and make | :05:14. | :05:19. | |
some big mistake and it quickly went bust and interest at the tax | :05:19. | :05:23. | |
pays at to bail them would stop and stare it has been to say to these | :05:23. | :05:28. | |
games and you need a lot more capital will stop it and at to be | :05:28. | :05:31. | |
about seven times more than that have held previously. That's | :05:31. | :05:38. | |
capital. We put that rude in place and everybody agreed. Winup Ward at | :05:38. | :05:43. | |
is to insure the rules are exactly what is required and we report on | :05:43. | :05:51. | |
all of those institutions. When the EU report? We report in November | :05:51. | :05:54. | |
and we tracked the major banks who has made to back in the world have | :05:54. | :05:59. | |
increased the capital more than 20% already. There are no win it | :05:59. | :06:05. | |
position in the next year but if they take profits after tax, they | :06:05. | :06:13. | |
take proper its they will meet the new requirements. This is the | :06:13. | :06:20. | |
agreement. UN the mentally the question is, you confident that we | :06:20. | :06:24. | |
will not major phase of by mental institutions which the taxpayer | :06:24. | :06:30. | |
needs to coming to bail them? At a huge cost, Mervyn King has said | :06:30. | :06:35. | |
clearly that he does not want the banks to become a problem with | :06:35. | :06:40. | |
public finances. He is right. I shoot at you stop everybody shiver | :06:40. | :06:44. | |
at you stop this is a capitalist system. It institutions make | :06:45. | :06:50. | |
mistakes they should be abrupt. Bond holders of those institutions. | :06:50. | :06:55. | |
The capital alone has not sold at. All that the Aussies make it less | :06:55. | :06:59. | |
likely to happen. What needs to change and what will change and | :06:59. | :07:04. | |
once in place by this year in the UK and the US and Canada is a | :07:04. | :07:14. | |
:07:14. | :07:15. | ||
regime so that the authorities and bail them, the bondholders, meaning. | :07:16. | :07:21. | |
Or are not one International Review to report parity? Regular Tory | :07:21. | :07:30. | |
authority. We have agreements with my new owners. Widowed at one club | :07:30. | :07:36. | |
will regulate. As a few reasons for that. It ultimately involves | :07:36. | :07:41. | |
different legal systems hand bankruptcy codes between the UK and | :07:41. | :07:49. | |
it and the US, secondly it requires questions of fiscal and budgetary. | :07:49. | :07:57. | |
But Lee one issue is who is on top of these institutions? Has been | :07:57. | :08:02. | |
filings warm the regulatory side but that brought that we could have | :08:02. | :08:07. | |
one club will rip him at a sitting there. War I'm not international | :08:07. | :08:12. | |
commercial laws? And it's different, international commercial laws and | :08:12. | :08:18. | |
agreements as opposed to that. We could move towards much more | :08:18. | :08:21. | |
regulation but that is distinct from actually adding one regulatory | :08:21. | :08:28. | |
body. But you had the US authorities and at too much it | :08:28. | :08:32. | |
looked much in London and another problem with the euro crisis | :08:32. | :08:38. | |
meaning the opera is put pressure on banks retreat and the national | :08:39. | :08:43. | |
borders because it is the euro break up. That spirit goes against | :08:43. | :08:47. | |
international rectories is the new Speaker up. The two things. I agree | :08:47. | :08:52. | |
on the first warning in turns of the dispute between the regulatory | :08:52. | :08:59. | |
bodies and its want in that the organisations such as the owners | :08:59. | :09:04. | |
can provide objective perspective is using as discussions to broker | :09:04. | :09:08. | |
those but about Europe, incredibly important, that's what's happening. | :09:08. | :09:13. | |
National regulators are encouraging institutions to put victims will to | :09:13. | :09:18. | |
the detriment of a hobby European financial system. I mean the market | :09:18. | :09:22. | |
related to that monetary systems. The solution there within the | :09:22. | :09:29. | |
Common Monetary Unit under the legal system is going to bids it a | :09:29. | :09:33. | |
single European regular it. Bat under the jurisdiction of the | :09:33. | :09:41. | |
Central Bank. We'll also owes the wheat Europe pressure on banks to | :09:41. | :09:45. | |
increase cross-border lending. You see a decline of print for us from | :09:45. | :09:50. | |
the north to the sound of which is jeopardising recovery. That's the | :09:50. | :09:57. | |
European problem and something that is a concern was at its is a huge | :09:57. | :10:02. | |
concern. It is his protectionism? It a form of protectionism but the | :10:02. | :10:06. | |
monetary union was built up on not against on foundation. There was no | :10:06. | :10:13. | |
common brick you later. He was no physical relationships between | :10:13. | :10:17. | |
these countries and not enough labour market within the monetary | :10:17. | :10:20. | |
and it's the colt will regions as opposed legal reasons and all | :10:20. | :10:26. | |
others actors make that single monetary unit less robust than of | :10:26. | :10:36. | |
:10:36. | :10:38. | ||
the US. There are no close fiscal integration. It would be odd to | :10:38. | :10:44. | |
have won with appear. You use it in Canada that you risen crisis is the | :10:44. | :10:52. | |
number one problem for you. When you act look at its to do so all | :10:52. | :10:58. | |
the officers, what do you think was you have confidence? Is two degrees | :10:58. | :11:01. | |
of dealing with the European crisis. The minimum wage is that the crisis | :11:02. | :11:08. | |
is contained. There is adequate firewalls put in place so that | :11:08. | :11:11. | |
Europe and address the deep underlying problems over the course | :11:11. | :11:17. | |
of a few years and this will take used to rebuild. It's not just | :11:17. | :11:22. | |
building up political institutions which are essential but at its use | :11:22. | :11:27. | |
and constitutional issues but to it just underlines structures have | :11:27. | :11:31. | |
been a Commons, the Spanish economy needs to be more competitive in | :11:31. | :11:36. | |
comparison to Germany. Putting fiscal houses and will go. This | :11:36. | :11:43. | |
will take years. What we look for his wall put in place and a | :11:43. | :11:53. | |
:11:53. | :11:56. | ||
combination of the European binges. Midges I. E I'm and needs to buy | :11:56. | :12:02. | |
time for these adjustments. Use a bit I am. Can the's position is | :12:02. | :12:10. | |
that you will not be more money to I am careful pilots to euros. | :12:10. | :12:20. | |
:12:20. | :12:22. | ||
Government him. The at spinner. It's not just a bottomless pit. | :12:23. | :12:28. | |
own more but there are many. The position of her government and is | :12:28. | :12:31. | |
it he's mourning into Europe it should be under the terms, and yet | :12:31. | :12:37. | |
I am at lending policies that borrows from the IMF and the | :12:37. | :12:42. | |
entirety of the authority's relative to those countries and | :12:42. | :12:48. | |
currencies on the other side able to be him and all those entities | :12:48. | :12:52. | |
including the European Commission as what's called conditions | :12:52. | :12:57. | |
bringing to do inconsistency to access to the pounds. That's what | :12:58. | :13:05. | |
happens in all those programs. A neat to get the design right. It | :13:05. | :13:10. | |
goes back to that climbing. It's not a question of just one of set | :13:10. | :13:16. | |
of programs. This is an adjustment process. It can ultimately be done | :13:16. | :13:19. | |
but you just put Prosser's that will take years. Her how many | :13:19. | :13:24. | |
years? I can come back here in three years and we could still be | :13:24. | :13:29. | |
talking about this. Win the Governor of the European Central | :13:29. | :13:33. | |
Bank said in July in London that he would do what it takes to say the | :13:33. | :13:37. | |
euro, the markets rose thinking he would take robust action. Since | :13:37. | :13:46. | |
then people said he did create a false impression? The market Ms | :13:46. | :13:51. | |
raid what you announced one week later. To Rea but wait at Myer at. | :13:51. | :13:57. | |
The measures announced towards the end of July, but one major images | :13:57. | :14:04. | |
and the Big Sue in the way to address this crisis. They go | :14:04. | :14:08. | |
directly to their responsibilities to get rid of convertibility | :14:08. | :14:18. | |
:14:18. | :14:24. | ||
rescues -- Rees. Countries need to pay more -- Rees. -- risk. He | :14:24. | :14:29. | |
delivered what he alluded to. you think Winnie the about the | :14:29. | :14:35. | |
governor or the German bank recently said in an interview in | :14:35. | :14:43. | |
July I'd at he thinks that policy makers have estimated the Central | :14:44. | :14:49. | |
Bank's expect eight sheets. Using for price stability and to promote | :14:49. | :14:53. | |
growth and unemployment and stabilising the banking system. | :14:53. | :14:59. | |
You're governor. This applies to the European Bank people expecting | :15:00. | :15:09. | |
:15:10. | :15:12. | ||
too much. What other tools in your If I can speak for Mario Monti as | :15:12. | :15:17. | |
well, I know both gentlemen quite well. We are all in agreement that | :15:17. | :15:22. | |
central banks cannot solve this crisis. They have to focus on first | :15:22. | :15:27. | |
delivering price stability. It is in nobody's interest to have | :15:27. | :15:33. | |
inflation. We have to do our bit, not in entirety, to keep the | :15:33. | :15:39. | |
financial system functioning. Thirdly, within the European | :15:39. | :15:46. | |
Monetary Union, they need to ensure that there is not a risk that | :15:46. | :15:51. | |
governments are paying that relates to the possibility that the euro | :15:51. | :15:55. | |
will not continue to exist, in other words they apply it -- paying | :15:55. | :15:59. | |
higher interest rates. Central banks can do that. But just that | :15:59. | :16:03. | |
will not be sufficient to produce the growth and employment of people | :16:03. | :16:08. | |
want. But there was another point, that all central banks come under | :16:08. | :16:11. | |
pressure to use monetary policy to tackle what are essentially | :16:11. | :16:17. | |
political problems. How far can the Government or central banks operate | :16:17. | :16:22. | |
independently from the political sphere? It is extremely important | :16:22. | :16:26. | |
that central banks... We are all given remits from national | :16:26. | :16:30. | |
authorities. They are grounded in legislation, sometimes constitution. | :16:30. | :16:36. | |
We have to be disciplined in acting consistently with those | :16:36. | :16:40. | |
responsibilities. But then we act independently within that context. | :16:40. | :16:46. | |
It is essential we act consistently, again going back to the ECB, | :16:46. | :16:50. | |
clearly grounded why they are doing what Mario Draghi has proposed an | :16:50. | :16:55. | |
is grounded in the remit. As long as we continue to do that, the | :16:55. | :16:59. | |
political independence of the central back should be assured. | :16:59. | :17:07. | |
Looking at the UK, in August, it downgraded the economic forecast | :17:07. | :17:13. | |
for growth to 0%. And yet Mervyn King said previously that the | :17:13. | :17:22. | |
government Bank of England, weight, things will get better. But it has | :17:22. | :17:27. | |
not happened. Do you think he is doing the right things here? Yes. | :17:27. | :17:32. | |
Relative to their mandate, to deliver price stability, the Bank | :17:32. | :17:37. | |
of England has anticipated much of the softness in the UK economy and | :17:37. | :17:41. | |
provided a tremendous amount of stimulus. What is different than | :17:41. | :17:46. | |
when, I don't know when exactly you are quoting Mervyn King, but what | :17:46. | :17:50. | |
happened in the intervening months is Europe has got much worse. That | :17:50. | :17:55. | |
is having an impact not just on the UK economy, on the Chinese economy | :17:55. | :18:01. | |
as well. It is even impacting the Canadian economy, despite the fact | :18:01. | :18:06. | |
that they are relatively a minor trading partner to the EU. That is | :18:06. | :18:11. | |
shading a lot of UK outcomes as well. But the one clear things most | :18:11. | :18:13. | |
central bank governors have is obviously that their colleagues | :18:13. | :18:18. | |
they have set the level of interest rates and some people have said | :18:18. | :18:21. | |
that perhaps they are too preoccupied with keeping price | :18:21. | :18:30. | |
stability and making sure inflation does not get beyond 2% -- below 2%. | :18:30. | :18:35. | |
That perhaps the argument of some economists, but a bit of inflation | :18:35. | :18:40. | |
might not be a bad thing, people might say if they have index-linked | :18:40. | :18:45. | |
wages that their income will go up a bit. In real terms, the cost of | :18:45. | :18:51. | |
borrowing of their loans will go down. Are we all to her -- obsessed | :18:51. | :18:55. | |
with inflation prices? I think we are appropriately obsessed with | :18:55. | :18:59. | |
price stability. The risk in the UK has been deflation. What the Bank | :18:59. | :19:03. | |
of England did over the course of the last very difficult year and | :19:03. | :19:07. | |
half is continue to provide additional stimulus. Interest rates | :19:07. | :19:11. | |
cannot go lower. They provided additional stimulus through bond | :19:11. | :19:15. | |
purchases and quantitative easing. In order to ensure that at this | :19:15. | :19:19. | |
point in time, and subsequent months, there is not deflation in | :19:19. | :19:26. | |
the UK. Price stability goes two ways. It is nice that was said... | :19:26. | :19:33. | |
He did say that. Let's take a couple of examples. Briefly. If you | :19:33. | :19:38. | |
are on a fixed income, I am not sure he has done you a favour. But | :19:38. | :19:42. | |
the second thing is that in order for this to work, in order for this | :19:43. | :19:46. | |
to make a difference, you have to get ahead of the bond market and | :19:46. | :19:50. | |
have a large surprise quickly in order to make a difference on the | :19:50. | :19:54. | |
fiscal side. And it would work. know they are looking for a | :19:54. | :19:57. | |
successor of Mervyn King when he stepped down. Your name is | :19:57. | :20:02. | |
circulated in the press. Are you interested? I am interested in who | :20:02. | :20:08. | |
they kick. But it might be you. Your wife is English and have | :20:08. | :20:13. | |
connections. Why not? It is an extremely important post and I am | :20:13. | :20:17. | |
focused on my post at the Bank of Canada. I look forward to working | :20:17. | :20:21. | |
with the next Governor of the bag of England. But until June next | :20:21. | :20:30. | |
year, I enjoy working in Canada. or never? Both. Looking at Canada, | :20:30. | :20:34. | |
although you don't have much exposure to fading European bans | :20:34. | :20:38. | |
all the debt crisis in the eurozone, you do through the US, your biggest | :20:38. | :20:42. | |
trading partner. So therefore the eurozone is a problem. But the | :20:42. | :20:46. | |
narrative has always gone that Canada's financial institutions | :20:46. | :20:50. | |
whether the financial crisis well. Is that still the case? You have | :20:50. | :20:56. | |
still got high household debt at the moment and overheating, the | :20:56. | :20:59. | |
markets and so on. There are problems in the banking system. | :20:59. | :21:04. | |
Aren't there? Our banking system is still the strongest, one of the | :21:04. | :21:09. | |
strongest, in the world. We have one of the highest capital rates | :21:09. | :21:13. | |
and lowest liquidity. The issue is in a property market and household | :21:13. | :21:16. | |
dead but they have both been increasing over the course of the | :21:16. | :21:20. | |
recession that the UK and others have been in. Because there is no | :21:20. | :21:25. | |
export market. That is where growth years. We have tightened the | :21:25. | :21:30. | |
regulations around lending into property four times. We have | :21:30. | :21:35. | |
increased capital ratios so that by January 1st, we will be at the end | :21:35. | :21:41. | |
state for capital. But you banking crisis, Standard & Poor's has | :21:41. | :21:44. | |
really revised its outlook on several Canadian banks from stable | :21:44. | :21:49. | |
to negative. Could a banking crisis the brewing heir? No. That is the | :21:49. | :21:56. | |
short answer. The Asher brewing their? Are the difference is that | :21:56. | :22:01. | |
any risky lending to the property market is backed by insurance that | :22:01. | :22:04. | |
is provided effectively by the Governor of Canada. If there were | :22:04. | :22:08. | |
issues, it very quickly goes back on to the Governor's balance sheet | :22:08. | :22:13. | |
and that is the balance sheet that is the strongest. Amongst the | :22:13. | :22:17. | |
strongest in the G20. We talked about interest rates and Mervyn | :22:17. | :22:22. | |
King at what about you. Would you raise interest rates? We are in a | :22:22. | :22:25. | |
very different place than the major crisis economies such as the UK. | :22:25. | :22:29. | |
Our economy is almost at full capacity. The labour market has | :22:29. | :22:34. | |
been growing. The extent to which we continue to grow above trend, we | :22:34. | :22:37. | |
may withdraw some of that monetary policy stimulus in the end. | :22:37. | :22:43. | |
Interest rates are 1% in Canada, very low. We have a financial | :22:43. | :22:48. | |
system which is firing all cylinders so we will adjust if it | :22:48. | :22:52. | |
is appropriate. That said, the world as a dangerous place for | :22:52. | :22:57. | |
stuff it is. We have seen growth downgraded to a% in China, 6% in | :22:57. | :23:07. | |
:23:07. | :23:07. | ||
India, 2.5% in Brazil and those on major economies. -- 2% -- 8% in | :23:07. | :23:13. | |
China. Will that affect you? years. Commodity prices are down, | :23:13. | :23:18. | |
still higher than historic averages, but there is an adjustment and a | :23:18. | :23:27. | |
filly synchronised the acceleration of the global market. Two keep | :23:27. | :23:32. | |
things. You wear two hats. Do you think that we are moving in the | :23:32. | :23:37. | |
right direction to make sure that failing financial institutions are | :23:37. | :23:41. | |
not bail out by the taxpayer and that we will have a regulatory | :23:41. | :23:45. | |
system which is transparent, which will also ensure that we don't see | :23:45. | :23:53. | |
the kind of scandals that we are now hearing about? I am questioning | :23:53. | :23:57. | |
whether we are moving in the right direction. By the end of this year, | :23:57. | :24:01. | |
it will be absolutely clear to you, to institutions and there G20 | :24:01. | :24:05. | |
leaders what is left to be done and that everybody is held to account | :24:05. | :24:11. |