LONDON (dpa-AFX) - Bank of England Governor-designate Mark Carney said the bank should ultimately exit unconventional monetary policy measures in a manner that reinforces public confidence.
The exit should not disrupt the gilts markets as such disruption could lead to sharp movements in a range of asset prices and even threaten financial stability.
Regarding any change in monetary policy, he said, 'I have not made an assessment of the merits of altering the monetary policy framework in the UK and of course any change to the Monetary Policy framework would be the sole responsibility of HM government.'
But he said it is important that policy framework is reviewed periodically.
'In my view, flexible inflation targeting-as practiced in both Canada and the UK-has proven itself to be the most effective monetary policy framework implemented thus far,' he says.
As a result, the bar for alteration is very high. He said a central bank should be flexible regarding the time horizon to return inflation to target.
Carney will succeed Mervyn King in July. He said a five-year term is the right managerial timeline to relaunch the BoE with its broader responsibilities.
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