FSA's Turner backs Carney on broader central bank targets
February 7, 2013 6:14 AM EST
Central banks should consider targets beyond keeping inflation in check, given the severity of fallout from the financial crisis, UK Financial Services Authority Chairman Adair Turner said on Wednesday.
In a wide-ranging analysis of the difficulties being faced by policymakers to boost sluggish economies, Turner said a fundamental rethink may be needed in strategy.
Over the past three decades central banks have focused on keeping inflation within a certain target over the medium term but relying only on this core task is now being extensively challenged.
Mark Carney, the Bank of Canada governor who will take over the top job at the Bank of England in July - a post Turner had also applied for - has suggested a range of goals such as targeting a certain level of nominal gross domestic product.
Turner said such alternative targets should be considered as the ability of central banks to manage medium-term interest rate expectations may be seriously undermined given that interest rates in Britain and elsewhere are close to zero.
He said the more attractive alternative targets included a pre-commitment to keep rates low until and unless unemployment or inflation targets are met - the approach taken by the Federal Reserve.
"But there are also strong arguments for making any such shift temporary and for focusing strongly on how to achieve exit from a temporary regime, reverting to an inflation target when appropriate," Turner told students at the Cass Business School in London.
Carney on Thursday will be grilled by a panel of British lawmakers on his appointment and ideas he has aired for boosting economic growth.
Turner's current job ends next month when the FSA will be scrapped and the Bank of England becomes the main regulator for banks in Britain.
(Reporting by Huw Jones; editing by Stephen Nisbet)
Most Popular Slideshows
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
- NFL Thursday Recap - Denver Broncos 35, San Diego Chargers 21: Peyton Manning Has 3 TDs In Easy Win [PHOTOS]
- 2014 MLB World Series Game 3: Kansas City Royals 3, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- Verizon Motorola Droid Turbo Leaked Live Images Surfaces, Scheduled To Get Unveiled On Oct 28
- Update HTC One M7 with LG G2 with Android 4.4.2 as Sprint OTA: Fixes and Installation
- U.S. Targets Buyers of ISIS Oil, Threatens Sanctions
- ISIS Syria Airstrike Bombing Has Killed 550 People, Civilians Included
- Russia Blocking OSCE Monitoring Of Its Border With Ukraine
- Russia Slams US 'Double Standards' In The Fight Against ISIS