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The Bank of England governor said international institutions need to challenge populism after joining central bank leaders around the world in endorsing populism. Fed against threats to its independence.
Andrew Bailey “The rise of so-called populism makes the entire task more difficult” for institutions and groups responsible for assessing global economic imbalances, he said.
“Part of the purpose of international institutions is that from time to time they have to tell us things that we don’t want to hear, let alone act on,” he said in a speech to the Bellagio Group of economists and central bankers.
“Of course, they must be held accountable for the accuracy and quality of their assessments. But, having accepted that, we must call for an end to the shootings.”
He went on to say that populism “tends to attribute adverse conditions to external forces rather than pointing to shared challenges”.
“Third, it encourages a decline in trust so that domestic and international institutions are seen as apathetic, unresponsive, and acting in the interests of powerful and uncontrollable interest groups,” he said.
“For those of us who are institutionalized, the answer is we have to fight back with actions and not just words.”
Bailey did not specify which countries or leaders he was referring to, but his comments come as Donald Trump’s administration escalates its confrontation with the Federal Reserve.
On Tuesday, Bailey signed a statement supporting the Fed chair Jerome PowellTogether with the governors of central banks, including those in Europe, Sweden, Canada and Australia.
Bankers said they were “completely in solidarity” with the Fed, adding that maintaining the central bank’s independence was “critical”.
The report came after Powell said the Fed was threatened with criminal prosecution over his testimony about a project to renovate the central bank’s office building.
The Bank of America boss said in a video statement that “this unprecedented action should be viewed within the broader context of government threats and continued pressure.”
President Donald Trump has repeatedly criticized Powell and the Fed for not cutting interest rates as quickly as he wanted.