MNI BRIEF: IMF Should Focus On Excess Imbalances - BOE Bailey

The IMF needs to put the spotlight on countries running excessive deficits or surpluses, putting pressure on to tackle them, to lower the risk of nation states attempting to tackle them through tariffs and other trade restrictions which hit global growth, Bank of England Governor and Financial Stability Board head Andrew Bailey said in a speech.

Bailey said that the US needs to explain how it sees its internal imbalance, its large fiscal deficits, as sustainable while it views its current account deficit as unsustainable and China needs to address weak domestic consumption. Bailey said that while the IMF has no regulatory power to force change it could strengthen its assessment of imbalances and give prominence to them in its reports, such as its Article IV ones.

"There is a common interest globally in tackling excess imbalances before dangerous levels of trade restrictions come into play," Bailey, who champions a multilateral approach, said.

His speech, at the Mansion House, made no reference to UK monetary policy.