Trial now
PIPELINE

$6B Roche 4Pt Leads Mon's $17B Total Debt Issuance

PERU

Barclays on BRCP: Maintain 50Bp Hiking Pace

US TSY OPTIONS

10Y Call Spd

USDJPY TECHS

Remains Vulnerable

COMMODITIES

Oil Up As Saudi Raises Prices, Omicron Fears Subside

--BOE Carney's Mansion House Speech On Tech; Payments Revolution
--BOE Carney Leaves Monetary Policy Out Of Traditional Set Piece Speech
By David Robinson
     LONDON (MNI) - The Bank of England plans to consult on opening up its
balance sheet to new payment providers, Governor Mark Carney revealed Thursday
in his annual Mansion House speech.
     Any such move would transform the nature of payment systems, allowing new
players to compete on level terms with banks, and could heavily inflate the size
of the BOE's balance sheet.
     Following are key points:
     --Traditionally, only commercial banks were allowed to hold reserves, and
this was extended to other financial institutions including broker-dealers, but
on Thursday Carney revealed the BOE is mulling going a lot further.
     The BOE is launching a consultation on allowing new payment providers,
which could include social media companies and others, to hold central bank
reserves.
     The move could cut traditional banks out of payment loops, and boost the
development of electronic money - digital tokens - by giving them full central
bank backing.
     The move may reduce counterparty risk and result in "unlocking billions of
pounds in capital and liquidity that can be put to more productive uses," Carney
said.
     The BOE also plans to work with other central banks to deliver instant
settlements in different countries.
     --The BOE governor said systems such as the headline-grabbing Libra
payments infrastructure - backed by a cooperative of technology companies such
as Facebook -- could "dramatically lower the costs of domestic and cross border
payments."
     He stressed that such a system would be systemically important and that
from the outset it would have to meet the highest regulatory standards on
resilience and transparency.
     --Carney said the BOE would help with the groundwork on new funding
platforms for small-to-medium sized business lending and that it would work on
risks and opportunities associated with cloud computing technology.
     He also announced that the BOE would stress test banks' resilience to
various climate change scenarios.
     --The Mansion House speech has been used in the past by Carney and his
predecessors to set out monetary policy thinking but he avoided any reference to
the economy or Brexit.
     Instead, he based his speech on a review by banker Huw van Steenis of the
future of the UK financial system. The review, published Thursday, looks at how
the BOE could promote innovate and improve financial sector resilience.
     Carney is nearing the end of his term, with a successor expected to be
announced in the autumn.
--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com
[TOPICS: M$B$$$,M$E$$$,MT$$$$,M$$BE$]