Britain must NOT ‘tie its hands’ by accepting EU rules on the City of London after Brexit, warns outgoing Bank of England governor Mark Carney
- Mark Carney to step down as Bank of England governor on March 16 this year
- Uses valedictory interview to warn against alignment of financial rules with EU
- He said it is ‘not desirable’ for the City of London to be a rule-taker post-Brexit
Mark Carney has warned the City of London must not be forced to accept financial rules from the European Union after Brexit.
The outgoing governor of the Bank of England said Britain must not ‘outsource regulation’ of its financial sector once it splits from Brussels.
He argued it would not be ‘desirable’ to give the EU a say in how the City operates and that alignment with the bloc’s financial regulations would ‘tie our hands’.
Mark Carney, pictured in June last year, is due to step down as the governor of the Bank of England on March 16
Mr Carney is due to step down as governor on March 16 when his replacement, Andrew Bailey, will take over. Mr Carney has been in the role since July 2013.
The current bank chief has faced fierce criticism from Brexiteers in the past over comments which were viewed as being pessimistic about what leaving the EU could mean for UK prosperity.
But he struck a more optimistic tone in a valedictory interview with the Financial Times as he warned Brussels must not be able to dictate to the City after Brexit.
He said: ‘It is not desirable at all to align our approaches, to tie our hands and to outsource regulation and effectively supervision of the world’s leading complex financial system to another jurisdiction.’
Brussels is likely to put pressure on the UK during trade talks this year on the issue of financial regulation and alignment of rules.
The City is easily the biggest financial centre in Europe and the bloc will be fearful of being unable to control what happens there.
Mr Carney’s warning came as Boris Johnson prepared to meet Ursula von der Leyen, the new president of the European Commission, in Downing Street today.
The first face-to-face meeting between the pair will set the stage for trade talks which are due to kick off shortly after Britain leaves the EU on January 31.
Meanwhile, Mr Carney also used the interview to warn that central banks might not be able to fight off a sharp economic downturn because their monetary policy arsenals are still depleted from the global financial crisis a decade ago.
‘It’s generally true that there’s much less ammunition for all the major central banks than they previously had and I’m of the opinion that this situation will persist for some time,’ he said.
‘If there were to be a deeper downturn, (that requires) more stimulus than a conventional recession, then it’s not clear that monetary policy would have sufficient space.’