MNI POLICY: BOE Carney Expects Orderly Transition To Successor

--Carney Says There Are Strong Internal Candidates for Governor

--Major UK Banks "Neutral" On Brexit; No Risk To Stability

By David Robinson

     LONDON (MNI) - Bank of England Governor Mark Carney said that there was

still "ample time" to appoint his successor and achieve an orderly transition.

     Giving evidence to the Treasury Select Committee, Carney said regulators

had ensured that the major UK banks were "neutral" on Brexit, so that whichever

way it unfolded in coming days they would not take large losses.

     Carney is scheduled to leave at the end of January. He declined to comment

on whether he would extend his term if needed but said a wide range of people

had applied for the job and that the BOE had strong internal candidates.

     Following are key points from the evidence session:

     --Carney said the aim was to have an orderly transition from himself to the

next governor and that "There is ample time to accomplish that."

     He said that the UK would end up with a high quality governor and that

questions over whether he would stay on if needed were "hypotheticals."

     --The open recruitment process had encouraged "a wide range of high quality

people to apply" and that they also had a very strong internal team available.

     The job criteria for the new governor include experience in central banking

or at the top of a major financial institution. MNI has reported that members of

the interview panel which drew up the shortlist would go public if anyone who

did not meet the criteria was chosen as governor, which tilts the scales against

unconventional external candidates.

     --Asked about the risks of Brexit, with an end-month deadline looming,

Carney said: "I don't know what is going to happen in the next few days and from

now until the end of October."

     Whichever way it unfolded sterling was set to move significantly, but

Carney said major UK banks would not be at risk.

     "From a financial stability perspective what we care about is that the core

of the system, the big banks particularly, are not making a big bet on that and

that they can't be caught out by being wrong," he said.

     He added that the major banks were "in a position that is neutral."

     The BOE, which has set up dollar and euro swap lines, reckons that even if

the major banks were shut out of foreign exchange markets for 15 days or more

they should keep functioning.

     --Carney was asked about the possibility of the Bank committing to

supporting aim of a net zero carbon emissions target.

     He said that a new remit letter setting out the responsibilities of the BOE

would likely accompany the Nov. 6 Budget and discussed ways in which carbon

pricing and other policies could be supported by the financial sector.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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