Mark Carney Defends The Bank of England: “We Are Not Robbing The Poor To Pay The Rich”
In a speech delivered at the Liverpool John Moores University on Monday, Bank of England head, and former Goldman partner, Mark Carney defended his central bank’s near-zero borrowing costs which have been increasingly criticized by local politicians ever since the Brexit vote, claiming that central bank monetary policies have not been the cause behind wealth transfer.
Carney said the BoE’s actions had softened the hit to Britain’s economy since the global financial crisis, easing the blow for poorer households who suffer most from recessions.
“Has monetary policy robbed savers to pay borrowers? Has the MPC been Robin Hood in reverse? In a word, no.”
Which is surprising, because in many more words, some 20 pages worth, in March of this year, the BIS released a research report titled “Wealth inequality and monetary policy“, in which it said that its “simulation suggests that wealth inequality has risen since the Great Financial Crisis. While low interest rates and rising bond prices have had a negligible impact on wealth inequality, rising equity prices have been a key driver of inequality” and conclude that “this suggests that monetary policy may have added to inequality to the extent that it has boosted equity prices.”
So, in more than one word, yes.
This post was published at Zero Hedge on Dec 5, 2016.