DAVOS: Bank of England Governor Mark Carney said on Friday that markets are likely to be affected when central banks around the world raise interest rates, but that reforms to the financial system meant there would be limited impact on the real economy.
"What's the probability that there will be an adjustment in asset prices? Yup, that probability has gone up," Carney said when asked about the chance of sharp falls in asset prices during a World Economic Forum panel discussion.
"The question is whether the core of the financial system is in a position where it's going to amplify those movements in an adverse way and there will be a feedback to the real economy," Carney said. "And on that component of the probability, I would put that as quite low."
Reforms to the banking system since the global financial crisis meant there had been "a huge shift" in the preparedness of financial companies to cope with future shocks, he said.
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