Financial Regulatory Forum

LONDON, July 22 (Reuters) – Britain’s public finances will have to be brought back to a stable state as soon as signs of economic recovery emerge, Bank of England Deputy Governor Charles Bean said in an interview on Wednesday.
Speaking to the Western Mail newspaper, Bean also said the central bank would do its best to work with any new regulatory model introduced to try and prevent a repeat of the financial crisis.

“Every political party recognises that as the economy starts to recover it will be necessary to put the public finances on a sustainable footing. This may include generating more tax revenues, or on the other hand lower government spending — or less rapid growth in it,” he said.

He added: “Whatever the supervisory regulatory model turns out to be the Bank will absolutely do its best to make sure those arrangements function as well as possible.”

Asked about the state of the UK economy, Bean said business surveys were “recovering somewhat from the very low levels of the past few months” and stressed the need to get credit flowing to bring about a recovery.

“As optimism starts to return to the economy and firms start to invest again demand for credit will start to pick up…will supply (of credit) be there to accommodate it?” he said.