August 28, 2013, by CRBFS Professor James Devlin

Bank of England Governor Mark Carney in Nottingham

Governor Carney has stressed the importance of all having confidence in the banking system and our work here at the Centre for Risk, Banking and Financial Services would echo the need for high levels of System Trust on the part of consumers. All of our research as available at http://www.nottingham.ac.uk/business/forum/publications.aspx. Our research shows that consumers generally trust banks to be reliable, but are far less convinced that banks have their true interests at heart. It will take more than strengthened balance sheets to overcome such doubts.

The Governor is also confident that the Bank has the tools at its disposal to prevent another housing bubble, notwithstanding that it has pledged not to raise interest rates until Unemployment has fallen to less than 7%. He has just been asked WHEN unemployment will fall to 7% and he says he can’t be certain but there is only a 30% chance of this happening within 2 years and is likely to take 3 years or more. Until this time, he pledges that interest rates will not rise, and states that this will provide certainty for business. Of course, it also provides certainty of a less welcome nature for savers!

Most questions are concerned with productivity and investment in business and the fact that the UK needs to improve its productivity…and Governor Carney is confident that the UK economy has the potential to do better.

You can read the transcript of Mark Carney’s speech on the Bank of England website. 

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