Bank of England Governor Andrew Bailey’s Speech

The Bank of England Governor, Andrew Bailey, delivered a speech at Mansion House on July 15, 2025, discussing the future of the multilateral economic system and the UK payments infrastructure. The full text of the speech can be found on the Bank of England’s website.

Summary of the Speech

In his speech, Bailey emphasized the importance of multilateral institutions, such as the International Monetary Fund (IMF), in addressing global economic challenges. He stressed that efforts to address imbalances, such as large US deficits and China’s surpluses, must be handled cooperatively at the international level rather than through fragmented national policies. Bailey believes that good policymaking depends on multilateral coordination.

Key Points of the Speech

The key points of Bailey’s speech include:

• Support for the IMF: Bailey defended the IMF against US criticism, stating that the Fund is crucial for addressing global imbalances and should help convene international talks, particularly with the US.
• Financial Stability Risks: Bailey 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 Bank of England is monitoring closely.
• China’s Role: Bailey urged China to boost domestic demand to reduce trade surpluses and avoid future trade tensions and instability.
• Global Coordination: Bailey called for a joint effort between the IMF and the World Trade Organization to assess the state of the global trading system and prevent damaging economic fragmentation.
• Digital Currency: Bailey expressed support for improving digital payment infrastructure but remained skeptical about launching a retail central bank digital currency, stating that stablecoins cannot replace traditional bank money.
• 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.

Conclusion

In conclusion, Bailey’s speech highlighted the need for global cooperation to tackle financial imbalances, the importance of monitoring financial stability risks, and the need for caution when it comes to central bank digital currencies. His speech emphasized the importance of multilateral institutions and global coordination in addressing global economic challenges. As the global economy continues to evolve, it is essential to prioritize cooperation and stability to ensure a prosperous future for all.