Laura WilesAndrew Bailey, Governor of the Bank of England, has delivered a speech on trade in goods and financial services at the Irish Association of Investment Managers Annual Dinner in Dublin.
Bailey highlighted the importance of trade for open economies, and the need for reforms in the global trading system. He noted that the increased use of industrial policies globally has exacerbated trade tensions, where arguably these should only be used for limited domestic objectives, such as local market failures.
He also drew attention to the increasing complexity of supply chains and national security concerns, exaggerated by events like the COVID-19 pandemic and geo-political tensions, as disruptors of trade efficiency.
The speech highlighted the importance of the reciprocal financial services relationship between the UK and Ireland, using the 2022 shock to Liability Driven Investment (LDI) funds linked to UK pension funds as an example of effective cross-border cooperation.
Bailey acknowledged the reasons behind increased trade restrictions, but concluded by calling for reforms to the strained trade system, emphasizing the importance of reducing non-tariff barriers to increase market openness.