Daunting US$1 trillion task at Bank of England

Stretched: Police officers outside the Bank of England in London. New governor Andrew Bailey is concerned that the financial system is over-reliant on central-bank funding. — AFP

LONDON: Andrew Bailey is wagering that the Bank of England (BoE) can eventually achieve a stimulus withdrawal that neither his predecessors nor his counterparts ever really dreamed was possible.

Only 100 days in office this week, the new governor has already set out a daunting ambition reminiscent of the bold declarations of his predecessor, Mark Carney, by suggesting the institution should ultimately prioritise shrinking its balance sheet before raising interest rates. If that policy ever materialises, it won’t be easy.