Bank of England Governor Andrew Bailey joins other central bankers in declaring support for under-fire chair of the US counterpart
Some of the world’s top central bankers have piled in on a row with US President Donald Trump.
Bank of England Governor Andrew Bailey was among those to declare they “stand in solidarity” with Jerome Powell, chair of the US Federal Reserve.
The unprecedented move comes after Mr Powell revealed he was facing the threat of a criminal investigation under the Trump administration. US prosecutors have launched a probe into Mr Powell’s $2.5billion (£1.86billion) renovation of the Fed’s headquarters.
Mr Powell has been the target of repeated attacked by the Trump administration over its reluctance to cut interest rates faster. Mr Trump has gone as far as launching personal attacks on Mr Powell, branding him a “numbskull” and a “major loser” The President’s tough talking has shaken the understanding that central banks are independent.
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Mr Bailey is one of 11 signatories to the letter, which also includes European Central Bank president Christine Lagarde. The heads of central banks in Sweden, Denmark, Switzerland, Australia, Canada, South Korea and Brazil have also signed their names.
“The independence of central banks is a cornerstone of price, financial and economic stability in the interest of the citizens that we serve,” the statement reads. “It is therefore critical to preserve that independence, with full respect for the rule of law and democratic accountability.
“Chair Powell has served with integrity, focused on his mandate and an unwavering commitment to the public interest. To us, he is a respected colleague who is held in the highest regard by all who have worked with him.”
The statement marks a significant showing of support for Mr Powell, who suggested that the threat of criminal charges undermines the independence of the Fed. He said in a video statement that the “unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure”.
Reports claimed said that Ms Lagarde, who signed on behalf of the eurozone’s 21 central banks, was the key driver of the joint response, while much of the actual footwork to get individual governors on board was done by Pablo Hernandez de Cos, the general manager of the Bank for International Settlements, a central bank umbrella body.
Mr Powell’s term is due to end in May, with a successor yet to be announced by the Trump administration.
Mr Trump’s criticism of the Fed’s track record on rates has prompted a backlash from within his own party.