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New payments services like Facebook Inc.’s Libra could be granted unprecedented backing from the Bank of England under plans announced by Governor Mark Carney.
The BOE is planning to consult on allowing more firms to hold reserves at the central bank, which could “empower a host of new innovation,” Carney said in prepared remarks for a speech in London Thursday. At present, only commercial banks can store funds overnight.
However, the governor repeated that Facebook’s new cryptocurrency, which the technology giant announced this week, would be scrutinized “with an open mind but not an open door” and the “terms of engagement” must be adopted before any new payment services are launched.
In a speech that responded to Huw van Steenis’s report on the future of finance, Carney also announced:
- A climate change stress test to examine how banks would cope under extreme weather
- More work on an open platform for financing small- and mid- sized companies
- The bank’s plan to reduce its carbon footprint by adopting the recommendations of the Task Force on Climate-related Financial Disclosures, which was led by Michael Bloomberg, the founder of the parent company of Bloomberg News
The announcements are the latest in a range of changes Carney has made at the BOE. His tenure has seen the central bank expand its responsibility for regulation and delve into new areas of interest such as fintech and climate change.
The Canadian, who is due to leave in January, didn’t discuss monetary policy or Brexit in his final Mansion House speech. Earlier, the BOE’s rate-setting panel voted to keep rates unchanged, while noting that the perceived risk of a no-deal Brexit had risen.
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