Deutsche Bank has invaded money laundering probes
While Mark Carney spoke on Radio 4, the police gathered at the headquarters of Germany's largest lender, Deutsche Bank.
According to local reports, prosecutors are looking for Deutsche Bank's premises including Frankfurt headquarters as part of a money laundering probe
Bloomberg says about 170 officials and police were involved in the raids and added:
A survey of so-called Panamanian documents revealed evidence that Deutsche Bank helped clients set up off-shore accounts, prosecutors said.
Deutsche Bank reportedly did not report a suspicion of money laundering when the money received was transferred to accounts with the bank, a statement said.
Deutsche Bank's shares fell 3%, making them the worst shares on the German DAX.
Overview: Carney goes through the rope in Brexit
For a man who apparently sold project hystrics, Mark Carney sounded remarkably sensible in Today.
It helps the British banking sector yesterday approved BoE stress tests – which means that at least one part of the economy can handle Brexit intact in March.
Unfortunately, as Carney pointed out, the rest of the country is not in such good shape.
The Bank is deeply concerned by the fact that more than half of British companies have taken no action – either because they are failing or because they are facing untenable barriers when suddenly new customs controls and long port delays occur.
It left Carney's delicate balancing – argue for a transient arrangement in one breath, and insists it is not for it to say what Brexita's taste is best in the other.
As Carney states:
"It is in the country's interest to have some time to move on to any relationship that exists.
Carney approached the border of central bank independence at one point when it seemed Britain proposed to extend the implementation period (in the current drawing contract) and gave the UK enough time to prepare.
This would not be a delight for Brexita-supporting MPs who want a clean break as soon as possible.
And what about BoE's apocalyptic predictions that Britain may suffer the worst economic massacre (Carney-age?) In decades?
It seems that the Governor says we treat him with caution:
It is not what would happen the most, but what could happen if everything went wrong.
"These are very low probabilities – this kind of worst case scenario."
There is a predictable mix of reactions to Mark Carney's last comments.
James Duddridge, a conservative deputy for Rochford and Southend, is not a fan – he claims the governor can not be impartial.
Some listeners today were more impressed, though:
Carney: We need to prepare for Brexita
Question: Are you afraid that if Brexit goes upstairs, can people blame you for sounding so incredibly gloomy and scaring everyone?
No, Mary Carney reacts and returns to his key point – that Britain must be ready for Brexita (and 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. A thing that people do not have to worry about is a financial system – it's going to be there for them.
They can concentrate on what's more important.
Carney ends the interview by insisting that the bank is just a side in the movie Brexit.
The financial system is just a servant of the economy, and it's too far a central state for too long.
What happens to this economy makes others very important decisions.
That's the end of the conversation. Now I will have some reaction.
Question: What's good with Theresa May's Brezim contract?
Mark Carney plays straight, technocratic bats and says it's not up to him to choose between the different options:
Brexit is a unique situation where there is a potentially fundamental change in the business relationship with our largest trading partner. In this situation, the central bank's job is to ensure that the financial system is ready, the Governor says.
Carney: Britain needs a transitional period of Brexit
Question: Ten years ago, Congress voted to rescue the US, the markets plunged and then quickly made (that's the 2008 TARP drama). Can it happen again?
Carney insists he will not speculate on what can happen in Parliament.
But he repeats that the British economy needs more time to prepare for a life outside the EU and says:
Parliament will decide on the type of Brexita and the way we get there.
It is recommended to move to any form of Brexit Parliament
Question: So the fact is that we are not ready and what happens when MPs vote on Theresa May Bretton on 11 December?
Carney refuses to discuss hypothetical scenarios (!), But repeats that much work still needs to be done to prepare for Brexit who has no deal.
"The best we can say", countries and businesses and infrastructure are not yet ready.
Carney says it has to be seen objectively how much time is needed in the Brexit implementation period.
He stressed that the agreement agreed last weekend allows for an extension of the implementation period
Q: Is this a good idea?
From the point of view of the financial system, there is a sufficient period of 18-24 months, according to Carney (ie the Basic Case in the Drawing Agreement).
For the economy as a whole … it is for others to say, he adds.
It is sensible to accept a "sober and objective view" of how long we need to get where we go with Brexit, Carney adds.
Carney: We do not try to scare anyone
Q: But your critics say you're playing politics, trying to scare people … Andrew Sentance, a former banking politician, says your analysis is "highly speculative and extreme."
Carney denies it and says,
We have a great responsibility to prepare the system for what will happen, and we are doing it since the referendum.
Parliament called for this analysis, but it is an analysis to – get a financial system prepared for any form of Brexita that the country accepts.
Q: Do not you try to scare people to accept the type of Brexit you want?
I have no preference, Carney insists on it.
However, it agrees that the Bank "prefers a transition period" (as is the case with Theresa May's plan)
It is in the country's interest to have some time to move on to any relationship that exists.
From our contacts with companies we know that less than half of the companies in this country have started their contingency plans for the non-commercial company Brexit.
Q: But the head of the company, possibly Nissan's CEO, has heard your apocalyptic scenarios and said, "My God, do I have to get out of here?"
Carney says chief executives are also responsible for preparing for worst-case scenarios.
They understand what the bank says, and they will not misinterpret it.
Carney Interview on Radio 4
Mark Carney's interview with John Humphrys is now in the Today program.
Q: What is the difference between the forecast and the scenario?
The governor says that her job is to look at what could happen to Brexit – tariffs, harbor problems and financial markets.
Then these "very negative" results will fit into the scenario, find out what will happen to the banking sector, and then ensure that banks have more than enough capital to absorb those losses.
Then we know, they know and the public know they can cope.
As Carney states:
It's not what happens most. This is what can happen if everything goes wrong and we use it to help ensure things get better.
Mark Carney yesterday insisted that Brexit's analysis is a scenario, not a prediction (though this gentle difference loses).
Our economics editor, Larry Elliott, explains:
In fact, the bank does not say that the economy will drop by 8% in one year. Three conditions would have to be met: the UK would have to leave the EU without a deal for next spring; that departure would be like a blue clamp; and this would trigger repressive action from Brussels. "That might happen," Carney said, "which is unlikely to happen."
But even so it could be a final attempt to send MPs to support Theresa May Brexita, Larry adds:
In the weeks leading up to the EU referendum in June 2016, both the bank and the state treasury warned of the bad things that would happen when there was no choice. This time, the constituency is much smaller: 600 MPs to vote on the May EU agreement early next month. It looks like the last cube wheel.
Mark Carney Brexit's analysis is now on all leading UK sites.
The Telegraph has covered the governor's criticism, saying it has unleashed the "Project Hysteria".
"Mark Carney was so profound after the analysis of the economic impact of such an agreement that he was called" project hysteria, "accused of undermining the" independence and credibility "of the Bank of England.
Here is complete rounding:
Introduction: Bank of England under fire against Brexita's predictions
Good morning and welcome our coverage of the world economy, the financial markets, the eurozone and the business.
Mark Carney, the governor of the Bank of England, is now in the face of a political storm after warning that a failed Brexit could dump Britain into the worst recession since World War II.
An analysis published last night warned that the economy would drop by 8%, house prices would drop by a third, sterling would drop to parity with the US dollar and interest rates would rise if Britain left the EU without a deal.
Carney's report was clear – the economy would suffer a bad scenario without agreement, and many companies are simply not ready.
"Evidence from surveys and other UK authorities suggest that the country is not yet fully prepared for the Brexit bank."
In sharp contrast, the bank also gave Therese May some support – arguing that its deal would be better for economic growth.
However, it also predicted that GDP would be at least 1% higher in five years if the UK decided to stay; which is for those who advocate a popular vote on a final settlement.
Carney critics (and, since joining the bank in 2013, attracted several) accused him of undermining the independence and credibility of the bank.
One (hello unmarked) minister told the Daily Telegraph that the analysis is "crazy, hips and b —— s" (I do not think "b" is for Brexit …)
Eurosceptic Jacob Rees-Mogg was particularly low, dubbing Carney's insignificant Canadian politician, who managed to relocate Theresa Maya.
Secretary of Justice David Gauke also weigh:
Carney can defend himself – and he will have to do this morning. Radio 4 Today is about to discuss the bank's predictions soon.
- 8:10 GMT: Mark Carney interview on radio 4
- 10:00 GMT: Unlocking Consumer Confidence in the Eurozone
- 13:30 GMT: Personal consumption statistics in the US
- 19:00 GMT: Minutes of the US Federal Reserve sessions in November