HOLE JACKSON, Wyo (Reuters) – The Governor of the Bank of England, Mark Carney, aimed the US's “destabilizing” role in the world's economy on Friday and said that central banks might have to come along. together to create their own backup currency.
Chairman of the Federal Reserve Jerome Powell and Governor of the Bank of England, Mark Carney chatting during the three-day conference "Challenges for Monetary Policy" in Jackson Hole, Wyoming, U., August 23, 2019. REUTERS / Jonathan Crosby
The dollar's dominance of the global financial system increased the risks of a liquidity trap of very low interest rates and weak growth, told Carney to central bankers around the world that they had collected in Jackson Hole, Wyoming, in the States. United.
“While the global economy is being reorganized, the US dollar is equally important when Bretton Woods collapsed,” said Carney, referring to the end of gold sales in the early 1970s.
Emerging economies have raised their share of global activity to 60% from around 45% before the financial crisis a decade ago, Carney said.
But the dollar was still used for half of the international trade invoices at least – five times more than the US share of global goods imports – the demand for fueling U. assets and many countries exposure to damaging damage from swings in US economy.
Carney – who was considered to be the next International Monetary Fund but failed to get support from European governments – said the problems in the financial system were encouraging protective and depression policies.
President U. Donald Trump said earlier on Friday that he was directing US companies to look at ways to close their operations in China, the latest increase in trading tension mounted between Washington and Beijing.
Carney warned that the equilibrium interest rates were very low at the same time as wars, financial crises and sudden changes in the banking system.
As a first step to reorganizing the world's financial system, countries could overthrow the IMF's resources to use $ 3 trillion as a better option for countries that defend themselves through massive piles of debt-denominated debt. .
“While concerted efforts can improve the functioning of the current system, ultimately a global multi-political economy is seeking a new IMFS (international monetary and financial system) to achieve its full potential,” said Carney.
Chinese yuan and the most likely candidate to be a reserve currency to match the dollar, but had a long way to go before it was ready.
The best solution is a diversified multilateral financial system, which could provide the technology, Carney said.
Facebook (FB.O) Libra was the highly recommended digital currency to date but there were many fundamental issues that had not yet been addressed.
“As a result, the best public sector that would provide such Synthetic Synthetic Currency (SHC) is an open question, possibly through a network of central bank digital currencies,” said Carney.
Such a system could damage the “devastating impact” of the US dollar on global trade.
“It is worth a person who knows monetary history to say that this center was not extant,” said Carney. “We need to identify the short, medium and long-term challenges that this system recognizes for the institutional frameworks and the launch of monetary policy around the world.” T
William Schomberg wrote; Edited by David Milliken and Andrea Ricci
(TTTranslate tags) USA (t) FED (t) JACKSONHOLE (t) CARNEY (t) The International Monetary Fund (t) US Federal Reserve (t) Company News (t) Western Europe (t) Diplomacy / Foreign Policy (t) Central Banks / Proceedings of the Central Bank (t) Currencies / Foreign Exchange Markets (t) Interest Rates / Policy (t) National Government Debt (t) Annexes (t) Debt / Markets Fixed Income (t) Europe (t) US Government News (t) Bank of England (t) United Kingdom (t) United States of America (t) Social Media