But as he outlined plans to scrap the Funding for Lending Scheme for household lending this morning, Mark Carney seemed more than mildly relaxed.
To the rustle of multiple press releases circulating the room, the softly-spoken Carney assured journalists the plan to concentrate exclusively on supporting lending to small and medium-sized enterprises was a joint decision by all parties involved.
So far, so on message. But while the Treasury’s press release talked up the benefits to SMEs, Carney seemed more interested in promoting strict mortgage underwriting standards and controls on high loan-to-value home lending. “We know what good underwriting standards are,” he said. “This is just basic. Why should we let standards deteriorate? Why should we stand by?”
Despite facing nearly an hour of questions, Carney managed to give little away. When Mortgage Solutions pressed him on the impact of ending FLS on a fledgling housing market recovery, he insisted the forecast remained sunny. “We see near term momentum in both housing activity and prices,” he said. “So we expect a pick-up in mortgage approvals and housing transactions even in the context of these measures.”
If the governor is concerned about risky lending, asked one journalist, hasn’t Help to Buy 2 with its 95% loan-to-value mortgages just made life more difficult for him? He batted it away. “It is very early days for Help to Buy.” So will the Financial Policy Committee intervene if things look risky? “We have been invited to provide annual advice on whether any of the key conditions should be changed. We of course could provide that advice at any time.”
Next came Scottish independence. His predecessor, Mervyn King, had chatted in a “basic way” to Scotland’s first minister, Carney revealed. Despite the Scottish government’s focus on continuing a monetary union in its independence white-paper, it emerged there have been no further talks. “I am sure it will happen sometime soon,” said the diplomatic governor.
When it came to the Co-op Bank, though, Carney’s recent arrival to the Old Lady of Threadneedle Street allowed him to sit back. Instead, Prudential Regulation Authority chief executive Andrew Bailey fielded questions about how the Reverend Paul Flowers got his job as Co-op Bank chair. He, too, avoided controversy, by stressing he was not in charge at the time.
“The bar to get someone out once they are approved is higher than to get them in,” he added dryly.
And with questions over, the governor and his retinue made a brisk exit, leaving behind them a swirl of press releases and a huddle of journalists still pondering who pulled the plug on FLS.
