French cenbank chief says Britain crisis shows risk of ‘vicious loop’ -FT

Posted on October 17, 2022Comments Off on French cenbank chief says Britain crisis shows risk of ‘vicious loop’ -FT

© Reuters. FILE PHOTO: Francois Villeroy de Galhau, Governor of Banque de France, attends the Paris Europlace International Financial Forum in Paris, France, July 12, 2022. REUTERS/Benoit Tessier

(Reuters) – France’s central bank has warned that recent turmoil in the British bond markets shows the “vicious loop” governments face if they undermine rate-setters’ efforts to curb soaring inflation, the Financial Times said on Tuesday.

Francois Villeroy de Galhau, the head of the Bank of France, urged global regulators at the Financial Stability Board to “deliver now on clearer and stricter rules” to ensure funds and traders build stronger liquidity buffers, the newspaper said.

“We need more data, and in each jurisdiction, we need some kind of liquidity stress testing,” he added in an interview.

British finance minister Jeremy Hunt, appointed last Friday after Prime Minister Liz Truss sacked close ally Kwasi Kwarteng, jettisoned the remaining major planks of her tax-cutting agenda on Monday, and scaled back her vast energy support scheme.

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Comments Off on French cenbank chief says Britain crisis shows risk of ‘vicious loop’ -FT