Bank of England Governor Calls for Action Against Populism

The Governor of the Bank of England, Andrew Bailey, has urged global institutions such as central banks to take a stand against populist movements that threaten financial stability. In a recent speech addressed to economists and central bankers, Bailey emphasised the importance of regaining public trust in multilateral institutions.

Bailey described the rise of populism as a significant challenge, stating that it undermines economic stability. He noted that proponents of populism often position free trade in opposition to domestic workers and attribute unfavourable economic conditions to external factors rather than acknowledging shared challenges faced by countries.

The Governor highlighted the necessity for multilateral institutions to adapt and reform, especially in light of growing public scepticism. He called for these institutions to act in the public interest and to be prepared to implement necessary changes, similar to reforms undertaken in the past.

Addressing the relationship between populism and economic policy, Bailey pointed out that the benefits of free trade have not been evenly distributed. This has led to an erosion of social cohesion and a decline in social capital. He stressed the importance of governments and regulators in ensuring that advancements in technology, particularly artificial intelligence and robotics, are developed in a manner that manages societal consequences effectively.

As global dynamics continue to evolve, Bailey’s call to arms serves as a critical reminder of the responsibility held by central banks and financial institutions to foster a stable economic environment.