LONDON (Reuters) – Bank of England Governor Andrew Bailey called for the world’s financial powers, led by the United States and China, to avoid economic nationalism in a speech released three days before Donald Trump is due to be sworn in as U.S. president.
Bailey said global cooperation was more likely to succeed when economic benefits were widely shared and that it was an open question whether there could be effective cooperation when the United States and China had such different philosophical outlooks.
“We can hope, but hope is not a winning strategy,” he said in the text of the speech he is scheduled to make at the University of Cambridge. “A world where there is greater actual and perceived risk of unequal outcomes and instability is one where collective action is harder and less likely to succeed.”
The International Monetary Fund warned earlier on Friday that unilateral measures such as trade tariffs, non-tariff barriers or subsidies could potentially leave all countries worse off.
Bailey said global cooperation should not be restricted to acute crises like the 2007-08 financial meltdown.
“And this is the risk we face today – the vulnerabilities are growing, and the necessary solutions are global, but they are not sufficiently great to tip into crisis multilateralism. And we don’t want that to happen,” he said.
Bailey made no comments in the text of his speech about the outlook for the British economy or the BoE’s monetary policy.
(Writing by William Schomberg; editing by David Milliken)
