Bank of England boss Mark Carney has weighed into the debate over whether Britain should remain a member of the European Union.
Mr Carney argued that being part of the EU had made the UK’s economy much more dynamic, but he warned that the 28-nation bloc could also threaten our financial stability if the proper safeguards aren’t put in place.
Mr Carney has urged Prime Minister David Cameron to call for reassurances that the UK’s interests would be protected, even though we had not opted to join the single currency.
Such an intervention is unusual for the head of the Bank of England, who traditionally would stand aside from political debate.
However, Mr Carney has shown himself more willing than many of his predecessors to give his take on issues, having previously spoken about the possible consequences of Scottish independence and the financial strain that climate change places on global economies.
His latest comments, made during a speech in Oxford, are likely to be welcomed by the Prime Minister, who believes that the standpoint of such senior figures will strengthen his bargaining hand as he seeks to renegotiate the terms of EU membership.
On the one hand Mr Carney made it abundantly clear that the UK benefited greatly from EU membership. Conversely, the Bank of England boss has argued that the Government has every right to seek assurances that certain procedures will be put in place to prevent problems arising.
“Although the UK’s dynamism is the product of many factors…the EU has arguably bolstered it by establishing the world’s largest single market with free movement of goods, services, capital and labour,” he said.
“Greatly increased financial openness, in part associated with EU membership, has made the UK financial system larger, more complex and more exposed to shocks from abroad. These developments reinforced domestically generated vulnerabilities in the run-up to the global financial crisis.”