Newspaper article The Journal (Newcastle, England)

Helping the North East to Weather Any Future Storms; DON KOHN Says He Is Confident That the North East Can Have a Prosperous Future - and That the Bank of England Can Protect Us While We Build That Future

Newspaper article The Journal (Newcastle, England)

Helping the North East to Weather Any Future Storms; DON KOHN Says He Is Confident That the North East Can Have a Prosperous Future - and That the Bank of England Can Protect Us While We Build That Future

Article excerpt

LAST week I had the pleasure of visiting Newcastle in my role as a member of the Bank of England's Financial Policy Committee. It was my first visit to the North East of England, a region I was especially keen to visit since I was born and grew up in my own 'North East' - Pennsylvania in the north east of the United States.

As I arrived at Newcastle Central Station I was immediately struck by the grandeur of the place and the parallels with the city where I was born, Philadelphia.

Both cities played pivotal roles in the industrial revolution of the 19th century and retain many architectural symbols of their rich histories. And, whilst both of our 'North Easts' have found the transition to a post-industrial economy challenging at times, it is interesting to note that both have successfully put arts and culture and their universities at the heart of their regeneration efforts.

So, aside from learning more about your fascinating region, why was I in Newcastle? The principal reason for my visit was to meet with representatives from a number of locally-based businesses who are contacts of the Bank's Agency for the North East.

I met a number of people from the property sector, such as estate agents, mortgage lenders, surveyors and house builders.

I also took part in a round-table discussion focused on access to finance for companies. This was attended by providers and users of finance, including representatives from small firms, as well as the region's professional community.

These kinds of meetings are vital for my job on the Financial Policy Committee (FPC).

Whereas the Monetary Policy Committee (MPC) sets interest rates to control inflation and support economic growth and employment, the job of the FPC is different - our responsibility is to protect the stability of the UK financial system. We were created after the financial crisis to prevent a repeat of that debacle by identifying, monitoring and taking action to remove or reduce risks that threaten the resilience of the UK financial system as a whole.

Our objective, amongst other things, is to ensure that banks are safe and able to lend money to people with a good idea for a business or those who want to buy a home they can afford.

And, access to loans and other services from banks should be there for UK households and businesses with sound credit even in bad times and without the need for taxpayer support for the banks.

To do this, we've required banks to build up their capital and liquidity so that they can weather a storm.

So it's vital that I understand how well the financial system is meeting the needs of the UK economy and how that's being affected by our actions.

Listening to what people across every part of the UK say is probably more important now than ever given the uncertainty facing the economy after the referendum. …

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