opening remarks at oenb monetary policy panel by andrew bailey given at oesterreichische nationalbank, annual economic conference, vienna published on 23 may 2022 remarks this is a time of very large economic shocks, and particularly very large external shocks, most recently from russia ’ s invasion of ukraine. i say that as someone who wholeheartedly supports the cause of ukraine and the assistance we must give. we are in a period of rapidly rising energy, goods and some food prices. these are the most visible prices too. this is by far the main cause of high inflation, and is painful, particularly for those less well off. what can and should monetary policy do? there is a very important distinction between : whether monetary policy can anticipate and stop the effects on inflation of shocks ; and, if not, whether it should respond when they happen? with shocks such as pandemics and wars, the answer to the first question is more likely to be “ no ”. but the answer to the second is very much “ yes, monetary policymakers can and must take the actions needed to return inflation to target over a period that avoids unnecessary volatility in the economy ”. it is domestic actions that have to get us back to price stability. for monetary policy, the choice of policy actions is influenced by the nature of the shock we are facing. in the uk we are facing a very big negative impact on real incomes caused by the rise in prices of things we import, notably energy. we expect that to weigh heavily on demand. we judge the appropriate degree of monetary tightening taking that into account. what i reject is the argument that in our response to covid the bank ’ s monetary policy committee let demand get out of hand and thus stoked inflation. the facts simply do not support this. on the latest number, uk gdp in march was only 0. 6 % above its pre - covid level, and it is substantially below the path it was expected to follow pre - covid. what we do have is a very tight labour market. but that does not look like a story about rapid demand growth. the labour force has shrunk by around 1 % since the onset of covid. it looks much more like an impact from the supply of labour. the job of the bank of england is to return inflation to target at a time when a very large headwind from external shocks, and an internal shock from a fall in the labour force, are reducing real

what a difference a decade makes mark carney governor of the bank of england chair of the financial stability board remarks at the institute of international finance ’ s washington policy summit, the reagan centre, washington dc 20 april 2017 i am grateful to alice carr, wayne chapman, carsten jung and iain de weymarn for their assistance in preparing these remarks. all speeches are available online at www. bankofengland. co. uk / publications / pages / speeches / default. aspx introduction it ’ s a pleasure to be back at the iif ’ s washington policy summit. last time i spoke here ( in 2011 ) it was still early in the international financial reform process. from the iif ’ s perspective at the time, there were three major concerns : - the consistency of implementation across the g20 ; - the possibility of significant regulatory arbitrage in shadow banking ; and - whether the fsb / g20 ’ s ambitious agenda would impair the recovery. today, those debates have largely been settled. first, the new international minimum standards are being, by and large, consistently and promptly implemented in g20 jurisdictions. this progress is regularly assessed and transparently reported by the fsb and the imf. and in general, when countries have deviated from international standards, it ’ s because they have chosen to go further. second, activities which give rise to similar risks are being treated consistently regardless of where they originate. a series of measures have addressed the major regulatory arbitrage opportunities that encouraged shadow banking. contingent exposures of banks have been brought on balance sheet and appropriately capitalised. more generally, shadow banking is being replaced with market - based finance that adds diversification, competition and resilience to the system. as for the macroeconomic impacts, it has been apparent for some time that having well - capitalised, liquid banks is a pre - requisite — rather than an impediment — to growth. in those economies where reform has moved the quickest, the recoveries have been the most robust. indeed, the broader benefits of reforms are now being realised as the global financial system moves from fragility to resilience. credit is now growing in all major economies. the cost of financing has remained low. sources of finance are increasingly diversified between banks and markets. and the system is demonstrating an ability to dampen shocks rather than amplify them. the biggest question now is how to best take advantage of these years of hard work