Mark Carney, the governor of the Bank of England, has insisted Threadneedle Street does not hold a veto over George Osborne’s controversial Help to Buy policy should the scheme jeopardise financial stability.
The chancellor announced in October that the Bank would be asked to review the taxpayer-backed mortgage support scheme yearly, amid growing fears it could inflate an unsustainable housing bubble.
But in a letter to Treasury select committee chairman Andrew Tyrie, published on Thursday, Carney makes clear that while the Bank’s financial policy committee (FPC) could advise the government at any time if Help to Buy is putting financial stability at risk, the final decision about if it should continue will lie with the Treasury.
“The FPC has no power to require the Treasury to vary the terms of, or close, the Help to Buy scheme,” Carney writes in reply to a letter from Tyrie earlier this month asking him to clarify the Bank’s role. “The FPC only has the authority to make recommendations in connection with such matters … the FPC is not constrained by the government’s timetable for any such advice; it could make recommendations at any time.”
via The Guardian
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