13 Nov 2013

Carney: corruption, my reputation and British citizenship

Exclusive: Bank of England Governor Mark Carney tells Channel 4 News he will not be a “cheerleader” for the City and intends to “root out corruption” in the financial markets.

In his first major television interview since being appointed in July, Mr Carney said that despite the growing economy, people should not expect their wages to rise in real terms until mid-2014 at the earliest.

He said he would be prepared to raise interest rates before an election if this was necessary, and confirmed that he would take up British citizenship after leaving Canada to become governor.

Asked by Jon Snow if he was his “own man”, he answered: “Of course …. I’m an independent central banker.”

We have to root out corruption in these markets where it’s found. Mark Carney, Bank of England Governor

Referring to the single term he intends to serve at Threadneedle Street, he said: “I have one term … I have my reputation to lose and I will make sure I will do everything I can to make a series of right decisions.”

‘Root out corruption’

Questioned about alleged corruption in the foreign exchange markets in London, Mark Carney said he and his colleagues at the Bank of England were “not cheerleaders for the City”, adding: “Our job is to make the City safe effectively, make the financial system safe, and then it will find its own size.

“We have to change the structure of these markets and we’re working on that, and we have to root out corruption in these markets where it’s found.

“And we are very concerned about the allegations in the FX (foreign exchange) market, we are supporting the authorites, the FCA (Financial Conduct Authority) and others in their investigations … we’ll do everything we can to root this out.”

Mr Carney conceded that “not everybody across the country” is currently benefiting from the economic recovery. “Real wages (after inflation) are not picking up, they haven’t been for a number of years, and what’s required for them to pick up … is that business starts to have as much confidence in the recovery that’s necessary for them to start investing and that’s going to help boost real wages.

‘Real wage gains’

“So when the second half of our forecast, middle of 2014 through to the end of 2016, embedded in that forecast that we just released today, is that you start to see real wage gains.

“In order to get that, though, we need businesses to have the confidence that this recovery is going to be durable, which is why were doing what were doing with the banks, and what we’re doing with monetary policy.”

Asked if he would be prepared to raise interest rates before an election, he said: “Well, absolutely.” Mr Carney said he had cut interest rates in Canada in the run-up to a poll. “We decided that was the right thing to do because it was the right thing to do for the Canadian economy.

“It was in the middle of an election campaign and we did it. In these jobs, and I have the experience of being in these jobs, you just have to do the right thing with an eye on the medium term. That’s the horizon for central bank policy.”

British citizenship

When the Treasury announced Mr Carney’s appointment as the first non-Briton to head the Bank of England, it said he would take British citizenship.

Asked about this, he said: “I will. To take up my right to British citizenship, there’s a residency requirement. I made that commitment to the prime minister. The residency requirement actually extends to about the end of my term as it turns out, despite the fact that I have been married to my British wife for 18 years.”

Click here for a full transcript of the interview with Mark Carney