January 17, 2025 17:11 GMT
BOE: Bailey Speech On Bretton Woods Contains Nothing On Near-term BOE MonPol
BOE
Bailey’s speech, on “A Central Banker’s view of global challenges and expectations for the Bretton Woods Institutions’ response”, unsurprisingly contains nothing on near-term BOE policy.
To contextualise the two headlines run by Bloomberg:
- “I think the lesson of Bretton Woods as it played out is that the influence of collective action is non-linear. In other words, when the situation gets really bad, take the financial crisis, the call for international collective action and the willingness to submit to it, grows almost exponentially. It takes a good crisis as they say. But this is not a basis on which to run good policy. And this is the risk we face today – the vulnerabilities are growing, and the necessary solutions are global, but they are not sufficiently great to tip into crisis multilateralism. And we don’t want that to happen”.
- “Financial surveillance needs to be a particularly high priority for us all, including the IMF. There remain, and will do so, financial vulnerabilities to be fixed. We are seeing major changes in the form of financial intermediation as the role of non-banks grows. But – and just as Hyman Minsky predicted – there is a growing resistance to regulation and rule-making as memories of the Global Financial Crisis recede. We have to continue to win our arguments, and it is becoming more challenging. Bilateral and multilateral surveillance are an important tool here. We will have to lay out the risks and vulnerabilities with more prominence and thereby directly challenge the naysayers”.
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