A new and explicit policy on liquidity provision

Bank of England governor Mark Carney
Mark Carney at the Bank of England

The Bank of England has completely rewritten its policies on liquidity provision. The extreme conservatism of the previous governor, Mervyn King, which was modified much too gradually and grudgingly under the pressure of the financial crisis, has been replaced by a much more flexible policy. The new governor, Mark Carney, has acknowledged what Walter Bagehot said in 1873, namely that the Bank of England should lend freely to stem a panic. As he says: "140 years on, the bank has a clear and sound

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