Mark Carney: Bumpy Ride ahead for Global Economy

Mark Carney, Governor of the Bank of England.

THE DAILY TELEGRAPH: Bank of England Governor warns that as central banks unwind their unconventional policies, financial market volatility could return

Dramatic shifts in the financial landscape mean that a return to normal market conditions “could be bumpy”, Mark Carney, the Bank of England’s Governor has said.

Speaking at the International Symposium of the Banque de France in Paris, he discussed a shift in the form of corporate financing, away from traditional bank lending and towards instruments such as corporate bonds.

The Governor said that an increased reliance on these market-based forms of financing has put a premium on increasing the resilience of markets.

The present “low volatility environment” - reflecting a lack of uncertainty in markets - will change as central banks begin to unwind unconventional policy and raise rates, the Governor suggested.

While increases in interest rates will be gradual in nature, Mr Carney stressed, a bumpy ride may be inevitable - which in turn would affect the pace of those rate hikes. » | Peter Spence, Economics Correspondent | Friday, November 07, 2014