Black Country law firm Clark Brookes Turner Cary (CBTC) hosted a seminar with Bank of England agent for the West Midlands, Graeme Chaplin.
Mr Chaplin told the seminar, hosted in CBTC’s offices in West Bromwich, that his job was to be the eyes and ears of the Bank of England in the region, feeding information from the regional business community to policy makers in London.
He said: “The bank’s aim is to balance supply and demand in the economy largely through the setting of interest rates.
“The current challenge we have is that CPI inflation is well below the target of two per cent across the medium term that Parliament has set as our aim.”
Mr Chaplin outlined the job of the Monetary Policy Committee in trying to decide how long it would take for factors such as falling oil prices to wash through the economy and help inflation to return towards its target.
“But this is only one of our roles,” he said. “We now have a number of new statutory responsibilities since the financial crisis, with a key role being to consider how best to maintain financial stability.”
He said there was a much greater awareness of the factors that could cause future crises, hence regular stress testing of the banks.
“One area, for example, that we are looking closely at is the UK housing market, particularly the issue of high loan to income mortgages,” Mr Chaplin added.
“Another is the buy-to-let market which is increasing rapidly. Over 15 per cent of new mortgage lending is now into the buy-to-let market. How concerned should we all be about this? That is an area we are considering.”
Pointing out that it was important not only to rebuild the banking industry to avoid another collapse as seen in 2008 but also to rebuild faith in banking, he said that the fines and redress paid out by banks, while justified, did nothing to help the industry’s long term reputation..
Following a whistle-stop tour of other concerns such as exposure to emerging markets, and the UK current account deficit, Mr Chaplin took questions from Clark Brookes Turner Cary’s clients and contacts.
He was thanked by Bernard Shepherd, a consultant at CBTC and president of the West Midland Association of Law Societies, who said he was encouraged by the Bank of England’s willingness to listen to business in the regions and the views of those outside the City of London.