Bank of England Governor Andrew Bailey’s speech at Mansion House, 15 July 2025.
In summary.
Bank of England Governor Andrew Bailey delivered a speech defending the importance of multilateral institutions like the International Monetary Fund (IMF) in resolving global economic challenges. He emphasized that efforts to address imbalances—such as large U.S. deficits and China’s surpluses—must be handled cooperatively at the international level rather than through fragmented national policies. Bailey said good policymaking depends on multilateral coordination.
Key Points:
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Support for the IMF: Bailey pushed back against U.S. criticism of the IMF overstepping its remit, saying the Fund is crucial for addressing global imbalances and should help convene international talks, particularly with the U.S.
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Financial Stability Risks: He warned that countries with large deficits tend to face the greatest financial market pressure and stressed the importance of staying alert to financial stability risks, which the BoE is monitoring closely.
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China’s Role: He urged China to boost domestic demand to reduce trade surpluses and avoid future trade tensions and instability.
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Global Coordination: Bailey called for a joint effort between the IMF and World Trade Organization to assess the state of the global trading system and prevent damaging economic fragmentation.
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Digital Currency: On digital innovation, Bailey expressed support for improving digital payment infrastructure but remained skeptical about launching a retail central bank digital currency. He also said stablecoins cannot replace traditional bank money.
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New FSB Role: Bailey plans to use his leadership of the Financial Stability Board to create global resilience tests for financial institutions, including banks and hedge funds.
In short, Bailey made a strong case for global cooperation to tackle financial imbalances, highlighted risks to market stability, and called for caution on central bank digital currencies.
This article was written by Eamonn Sheridan at www.forexlive.com.