The governor of the Bank of England has said international institutions need to challenge populism, after he joined global central bank leaders in backing the US Federal Reserve against threats to its independence.
Andrew Bailey said the “rise of so-called populism makes the whole task harder” for agencies and bodies whose job it is to assess imbalances in the global economy.
In a speech given to the Bellagio Group of economists and central bankers he said: “Part of the purpose of international agencies is that from time to time they have to tell us what we don’t want to hear, let alone act upon.
“Of course, they have to be accountable for the accuracy and quality of the assessment. But, accepting that, we have to call out messenger shooting.”
He went on to say that populism has a “tendency to attribute unfavourable conditions to outside forces, rather than point to shared challenges”.
“And, third, encouraging a decline in trust such that institutions – domestic and international – are viewed as distant, unresponsive and acting for the benefit of powerful and uncontrollable interests,” he said.
“For those of us who are institutionalised, the answer is that we have to challenge back, in deeds more than just words.”
Mr Bailey did not specify which countries or leaders he was referring to, but his remarks come at a time when Donald Trump’s administration is escalating its confrontation with the US’s Federal Reserve.
On Tuesday, Mr Bailey put his signature to a statement of support for Fed chairman Jerome Powell, alongside the heads of central banks including in Europe, Sweden, Canada and Australia.
The bankers said they “stand in full solidarity” with the Fed, adding that it was “critical” to preserve the independence of central banks.
Its publication came after Mr Powell said the Fed was being threatened with a criminal indictment related to his testimony about renovation projects at the central bank’s office buildings.
The US bank boss had said in a video statement that the “unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure”.
President Donald Trump has repeatedly criticised Mr Powell and the Fed on its decisions not to cut the country’s interest rates as quickly as he would prefer.
