Deutsche Bank invaded in an investigation into money laundering
While Mark Carney spoke on Radio 4, police piled up to the headquarters of the German lender, Deutsche Bank.
According to local reports, prosecutors were looking for the location of Deutsche Bank including its headquarters in Frankfurt as part of an investigation into money laundering
Bloomberg said around 170 officials and police were involved in the raid, adding:
Investigations into the so-called Panama Papers revealed evidence of Deutsche Bank helping clients arrange foreign accounts, prosecutors said.
Deutsche Bank allegedly failed to report alleged money laundering when criminally obtained funds were transferred to accounts with banks, the statement said.
Deutsche Bank shares fell 3%, making it the worst performing stock on the German DAX index.
Snapshot: Carney walks on a rope in the Brexit storm
For a man who seems to peddle Project Hysteria, Mark Carney sounds amazingly reasonable on the Today program.
It helps that the UK banking sector bypasses the BoE stress test yesterday – which means at least one part of the economy can handle irregular Brexit in March.
Unfortunately, as Carney shows, other parts of the country are not in good condition.
The bank is clearly very worried that more than half of UK companies have not taken precautions for no agreement – either because they cannot deal with it, or because they face insurmountable obstacles if there is a sudden new customs inspection and a long delay in ports .
This has made Carney take a difficult balancing act – argue for transition arrangements in one breath, and insist on that not up to him to say the feeling of Brexit is the best in others.
Like Carney said:
"It is in the interest of the state to have time to transition to whatever relationship exists.
Carney approached the limits of central bank independence at one point, when he seemed to suggest that the UK might need to extend the implementation period (in the current withdrawal agreement) to give UK enough time to prepare.
That won't please lawmakers who support Brexit, who want a clean break as soon as possible.
And what about the BoE's apocalyptic predictions that Britain might suffer the worst economic slaughter (Carney-age?) In decades?
The governor seems to suggest that we treat him carefully:
It's not the most likely thing to happen but what can happen if everything goes wrong.
"This is a very low probability – the worst type of scenario like this."
Predictably, there were mixed reactions to Mark Carney's latest comments.
James Duddridge, Conservative lawmaker for Rochford and Southend, is not a fan – arguing that the governor failed to take sides.
Some listeners today are more impressed, though:
Carney: We have to get ready for Brexit
Q: Are you worried that if Brexit rises to the stomach, people might blame you because it sounds so gloomy and scares everyone?
No, Mary Carney replied, back to the key point – that Britain must be prepared for Brexit (and that's not yet)
[reminder: Britain’s biggest lenders all passed the Bank’s 2018 stress tests yesterday, meaning they could survive a disorderly Brexit]
The problem is readiness. What people don't need to worry about is the financial system – it will be there for them.
They can focus on more important things.
Carney ended his interview by insisting that the Bank was just a spectacle in the Brexit drama.
The financial system is only an economic servant, and has been too long a country center for too long.
What happens to this economy, very important decisions are being made by others.
That is the end of the interview. I will complete some reactions now.
T: What's so good about Theresa May's Brexit agreement?
Mark Carney plays a straight, technocratic bat, saying it's not up to him to choose between various choices:
Brexit is a unique situation, where there are substantial changes in trade relations with our biggest trading partners. In that situation, the task of the central bank is to ensure the financial system is ready, the governor said.
Carney: Britain needs a period of Brexit transition
Q: 10 years ago, Congress rejected the US bailout, the market crashed, and then they quickly passed it (this is the 2008 TARP drama). Could it happen again?
Carney insisted he would not speculate on what might happen in parliament.
But he repeated that the British economy needed more time to get ready to live outside the European Union, saying:
Parliament will determine the type of Brexit, and the path we take to get there.
It is advisable to have a transition to any form chosen by the Brexit parliament
Q: So the reality is we are not ready yet, so what happens when MPs choose Theresa May's Brexit agreement on December 11?
Carney refused to discuss the hypothetical (!) Scenario, but repeated that much work still needed to be done to prepare for unconstrained Brexit.
"Best as we know", the country's business and infrastructure are not ready.
Carney said there needs to be an objective view taken about how much time is needed, in the period of implementation after Brexit.
He pointed out that the agreement agreed at the end of last week allowed for an extended implementation period
Q: Is that a good idea?
From a financial system perspective, a period of 18-24 months is enough, Carney answers (i.e., the basic case in the Withdrawal Agreement).
For the economy as a whole … it's up to others to say, he added.
It makes sense to take an "objective and conscious view" of how much time we need to get to where we are going with Brexit, Carney added.
Carney: We're not trying to scare anyone
Q: But your criticism says you are playing politics, trying to scare people …. Andrew Sentance, a former Bank policy maker, says your analysis is very speculative and extreme.
Carney denied it, said:
We have a broad responsibility to prepare the system for whatever happens, and we have done it since the referendum.
Parliament demands this analysis, but analyzes it with purpose – to get the financial system ready for any form of Brexit taken by the state.
Q: Aren't you trying to scare people into accepting Brexit as you want?
I don't have a preference, Carney insisted.
But he agreed that the Bank "prefers a transition period" (as under Theresa May's plan)
It is in the interest of the state to have time to transition to whatever relationship exists.
We know from our contacts with businesses that less than half of businesses in this country have focused their contingency plans for Brexit without transactions.
Q: But the company boss, maybe the CEO of Nissan, can hear your apocalyptic scenario and say 'my god, I have to get out of here'?
Carney said the company's boss was also responsible for preparing the worst-case scenario.
They understand what the Bank says, and they will not misinterpret it.
Carney interviewed on Radio 4
Interview with Mark Carney with John Humphrys is on the Today Program now.
Q: What are the differences between estimates and scenarios?
The governor said the Bank's duty to see what could go wrong with Brexit – tariffs, problems at the port, financial markets fell.
Then put this "very negative" result into the scenario, to determine what will happen to the banking sector, and then ensure that the bank has more than enough capital to absorb these losses.
Then we know, they know, and the public knows, that they are able to handle it.
Like Carney said:
That's not the most likely thing to happen. That can happen if everything goes wrong, and we use it to help ensure everything gets better.
Mark Carney insisted several times yesterday that his Brexit analysis was a scenario, not an estimate (although this subtle difference was lost).
Our economic editor Larry Elliott explains:
The bank does not really say that the economy will shrink by 8% in one year. For this to happen, three conditions must be met: Britain will need to leave the European Union without an agreement the following spring; the departure will come as a leap from blue; and that will encourage punitive action from Brussels. "That's what can happen," Carney said, "not what is most likely to happen."
However, this could be a last-ditch effort to scare MPs into supporting Theresa May's Brexit agreement, Larry added:
In the weeks leading up to the EU 2016 referendum in June, both the Bank and the Ministry of Finance issued a warning about the bad things that will happen in terms of voting to leave, nothing came true. This time the number of voters is much smaller: 600 MPs will vote in the EU agreement in early May next month. It looks like the last roll of the dice.
Mark Carney's Brexit analysis is on the entire UK front page today.
The Telegraph led coverage of criticism of the governor, saying he had released & # 39; Project Hysteria & # 39;
"Mark Carney has been accused of undermining independence and credibility. The Bank of England after publishing an analysis of the economic impact of no such gloomy agreement has been dubbed" project hysteria "& # 39;
The following is a complete summary:
Introduction: The Bank of England is under fire for Brexit forecasts
Good morning, and welcome to our coverage of the world economy, financial markets, the euro zone and business.
Mark Carney, governor of the Bank of England, was in the eye of today's political storm after warning that Brexit no-deals could plunge the UK into the worst recession since world war two.
An analysis released last night warned that the economy would shrink 8%, house prices would drop by a third, sterling would slump to parity with the US dollar, and interest rates would soar if Britain left the European Union without an agreement.
Carney's message is very clear – the economy will suffer greatly from the scenario of no agreement, and many companies are not ready.
"Evidence from surveys and other British authorities shows that the country is not yet fully prepared for Brexit cliffs."
Instead, the Bank also provided support to Theresa May – arguing that the agreement would be better for economic growth.
However, it also predicted that GDP would be at least 1% higher in five years if the UK had chosen to remain; encouragement for those who encourage the Voice of the People on the final agreement.
Critics of Carney (and he has attracted some since joining the Bank in 2013), have accused him of undermining the independence and credibility of the World Bank.
A minister (unnamed) told the Daily Telegraph that his analysis was "crazy, crazy and b —— s" (I don't think ‘b’ is for Brexit …)
Eurosceptic Jacob Rees-Mogg moved very low, dubbing Carney a failed second-tier Canadian politician – a joke that drew some scathing rebuke for his efforts to overthrow Theresa May.
Justice Secretary David Gauke has also been weighed in:
Anyway, Carney can defend himself – and he has to get up this morning. He is scheduled to attend the Radio 4 program Today to discuss the Bank's estimates.
- 8.10am GMT: Mark Carney interviewed on Radio 4
- 10.00 GMT: Eurozone consumer confidence released
- 1.30pm GMT: US personal consumption statistics
- 7pm GMT: Minutes of the November meeting of the US Federal Reserve