Bank of England deputy governor Paul Tucker has called for more direct intervention from central authorities to ease credit conditions for borrowers.
Speaking at the Investment Property Forum’s Alastair Ross Goobey memorial lecture in London yesterday, Tucker (pictured) said the Government and the Bank of England should consider what more they can do to ease credit conditions for borrowers.
In February, BoE governor Mervyn King’s stated it was the role of the Government to intervene when it comes to directly easing credit conditions, rather than the bank.
In contrast, Tucker, a favourite to replace King as governor, believes the bank should look at what more it can do. He said: “An event [eurozone break up] with low probability but gigantic impact affects bank funding costs. This is gradually being passed on into lending rates for firms and households.
“The banks themselves did not bring about the underlying challenges facing the euro area. Given the costs to our economy, the authorities, including the bank, need to consider what more we could do to alleviate tight credit conditions in the UK.”