In one of his last interviews before he leaves his post at the Bank of England, Mark Carney said he was lucky he never had to cut interest rates below zero, as he believes it would have damaged the British economy. In the interview with Bloomberg news, he said ‘I accept that in other jurisdictions they can work, but I’m feeling fortunate that at least it looks like I’m going to get out without having negative rates’ adding that he was not a ‘huge fan’. He added that he does see the risk of a global liquidity trap and that central banks are ‘close to those limits’ however, they are ‘not yet there’.
One interesting question that he was asked was whether he or others could have foreseen Brexit. He stated that it could have been foreseen, referring to the former Prime Minister John Major and his tensions with the EU at the time, and how those tensions continued to increase over the last few years. This, together with the financial crisis and its associated 'economic hit', led to the 10 years after the crisis being the worst for real incomes in the UK since the middle of the 19th century. As he puts it ‘it was going to come out in some respect’. He was asked if he would still have taken the job if he had known the ups and downs of Brexit, ‘well yes’ was the reply.
Carney is coming to the end of his near 7-year term as the governor of the Bank of England and has been appointed as UN special envoy for climate action, replacing Michael Bloomberg in the part-time pro bono climate action role. He will oversee such things as building frameworks for financial reporting and risk management and mobilising private finance to invest in schemes that will help achieve the Paris climate agreement goal. On taking the role he said ‘The disclosures of climate risk must become comprehensive, climate risk management must be transformed, and investing for a net-zero world must go mainstream. The Bank of England, the UK government and the UK financial sector can play leading roles in making these imperatives happen’.
And his salary for taking on this new role … the princely sum of USD$1 a year, a far cry from the near GBP£900,000 he was earning as the world's best-paid central banker.
Lastly, it’s Valentine’s Day, the day you can declare your undying love for those closest to your heart. As Albert Einstein put it ‘You can't blame gravity for falling in love’. Me, I’m taking the wife to a back to the 80’s Valentine’s Party tonight …. Everyone loves a bit of Barry White!!!