bank of england future forum 2017 opening remarks given by mark carney governor, bank of england st. george ’ s hall, liverpool 16 november 2017 all speeches are available online at www. bankofengland. co. uk / speeches good afternoon. welcome to the bank of england ’ s future forum to everyone here in beautiful st george ’ s hall, and to those viewing on our webcast. my colleagues and i are delighted to be here in merseyside. it ’ s been three decades since i first visited. back then, i discovered my favourite band the lightning seeds, who would later pen england ’ s football anthem. we ’ ll learn next year whether the three lions can end what ’ s become fifty years of hurt. 1987 was the life of riley for local football. everton and liverpool were top of the tables, with the toffees beating the reds to win the championship – sadly their most recent of their 9 titles. how things change. it ’ s not pure and simple all the time. just like footballing fortunes, economic conditions in liverpool have waxed and waned. the de - industrialisation of the 1970s and 80s affected the region particularly badly, with unemployment ultimately rising to above 20 %. with the 1990s came revival and regeneration, with particular emphasis on the city ’ s rich cultural and economic history – a heritage rightly celebrated when city centre riverfront was designated a world heritage site in 2004 and when liverpool became european capital for culture in 2008. in the decade that followed that honour, the uk has been through a searing financial crisis and a recovery that has been even slower than that following the great depression. once the financial system was fixed, however, the uk became, until recently, the fastest growing economy in the g7. unemployment nationwide has fallen from 8. 5 % to 4. 3 %, a 42 - year low. in liverpool, the unemployment rate has declined steadily to 4. 7 % today, around 2 percentage points below its pre - crisis rate. the recovery here is being aided by further regeneration, both economic and physical – building the infrastructure that will enable businesses and households to flourish. these efforts are building on past successes, with liverpool now home to many award - winning museums including the museum of liverpool, the international slavery museum, and tate liverpool. liverpool council is working in partnership with businesses and other organisations to exploit the best of what each can bring. for example, liverpool council, liverpool fc and your housing group are working together to bring

' fear of floating'which means the tendency for their central banks to quickly resort to raising interest rates whenever the exchange rate is in danger of falling. what the chilean finance minister called the australian model, of course, is not unique to australia, 4 but it is associated with australia in latin american and asian economic circles because of australia's success in withstanding the asian crisis. while some countries such as chile see it as a sort of role model, many asian countries have chosen a different path by running current account surpluses, building up large holdings of international reserves and resisting changes in their exchange rates. as you know, we think this is a major reason for the growing global payments imbalances, and would be happier if they followed a model closer to our own. but that is another story. the interesting issue for other economies, particularly emerging market economies, is how do you reach the situation where you can borrow abroad in your own currency, or, to put it differently, where investors in other countries will willingly hold assets denominated in your own currency. when we look back and see how australia reached this position, it is a very interesting ( and reasonably recent ) story. the major step occurred when the government decided that it would borrow honestly from its own citizens. that is, it would stop using captive arrangements that force financial institutions to take government paper, and stop setting the interest rate on its own paper. in our case this occurred when we introduced the tender system for selling treasury notes in 1979 and bonds in 1982, and soon after made clear that the government would no longer borrow from the reserve bank, but instead borrow from the public to finance the budget deficit dollar for dollar. at first we had to accept very high interest rates, but in time demand for government paper expanded, and most importantly overseas investors began to find australian government bonds denominated in australian dollars an attractive investment. it was not necessary to ask them to invest, nor to do'road shows'on wall street to entice them. at the canada and new zealand also have the characteristics listed when describing the australian model. for a discussion of the difference between australia and some other commodity exporters, see : barry eichengreen and ricardo hausmann ( 1999 ), “ exchange rates and financial fragility, ” in federal reserve bank of kansas city, new challenges for monetary policy, pp329 – 368 ; and ricardo j. caballero, kevin cowan and jonathan kearns (