Mark Carney: Pull, push, pipes - sustainable capital flows for a new world order

Speech by Mr Mark Carney, Governor of the Bank of England, at the Institute of International Finance (IIF) Spring Membership Meeting, Tokyo, 6 June 2019.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is a pleasure to be at the IIF. I would like to speak today about your raison d'etre: sustainable cross border capital flows.

Capital flows can be an enormous force for good. For example, when my native Canada was an emerging economy, net capital inflows averaged 10% of GDP every year for around three decades.

But the recent history of capital flows is more chequered.

After all, the IIF was founded 36 years ago in response to the Latin American debt crisis. That crisis was the product of an initially well founded and productive - but ultimately over exuberant and destructive - recycling of petro dollars by the banking system.

That period provided painful examples both of how capital flows can support development and how capital flow volatility can undermine it.