LONDON, July 11 (Reuters) - Bank of England Governor Mark Carney and other top officials from the central bank spoke to reporters on Thursday after the BoE published its Financial Stability Report which looks at risks to the economy from the financial sector.
Following are some of Carney’s comments:
“The single most important determinant of the UK’s economic outlook remains the nature and timing of Brexit. The perceived likelihood of a no-deal Brexit has increased since the end of last year, and although the degree of preparedness for such a scenario has improved, material risks remain.”
“The major (UK) financial institutions have done what’s necessary. We can’t fully insulate ourselves from spillovers from Europe where there still are some things to be done.”
“Share trading obligation would be one example where European actions have the potential to create some disruption that could have knock on effects.”
“There’s a few orderly transitions and one of them is an orderly (Brexit) transition through Oct. 31 and an orderly transition to my successor, and of course I’ll make sure that that is the case.”
“I think we need to respect the process here...which is she (Christine Lagarde) has been nominated to be president of the ECB...There’s a process to confirm that and then there would be a formal process to select her successor...That process as per the good governance advice of the IMF should be open, transparent and merit based. There’ll come a time when that process launches and that’s probably the right time to answer that question.”
ON RISKS FROM OPEN-ENDED FUNDS
“Our sense is that the financial stability risks are increasing, which has added impetus to addressing this and trying to determine a domestic solution to what is a global problem, and obviously we are going to continue to work internationally.”
“Fundamentally there’s issues around any money laundering and counter-terrorism financing. Again, this is not learn-on-the-job stuff. It’s got to be rock-solid right from the start or it’s not going to start.”
“The FPC in this report is clear - there is no justification for firms to continue to increase their exposure to LIBOR.”
“Well-managed firms are expected to lead the transition and re-negotiate their contracts to refer to alternative reference rates well in advance of the end of 2021.”
“There has been a deterioration in the quality of inflows, as they’re measured, that are financing the current account deficit.
“What’s crucial is that first and foremost is that we maintain the elements that make the UK such an attractive place for investment. That starts with the macroeconomic framework... and that openness to trade and investment which has been a hallmark of this economy.”
Reporting by UK bureau