The governor of the Bank of England was speaking to the press after delivering a speech at Cass Business School, City University in London, in which he set out the vision of One Bank, where the MPC, FPC and PRA will be joined via a sharing of information.
Carney said: “The FPC is very alert as is the MPC to the potential risks that are created by this environment. In a recovering environment – that vulnerabilities in the housing market could increase.
“If necessary we’ve outlined all the other range of tools that we have as the FPC. We won’t have any hesitation to take the necessary steps but only at the right time and in the right proportions.”
He warned against complacency in the financial markets with “excessive risk taking” in the “the “relatively low” and “relatively predictable” rate environment.
Carney added: “That’s why the FPC is active, with major measures that we announced in November. Some of those are just coming into play now, the MMR standards of underwriting is just coming into effect next month officially.
“The stress testing process really just getting going and will run over the course of this year and so we are going to monitor the effectiveness of those.
“We could take other measures. I don’t want to speculate on any other measures that we could take – we actually have an FPC meeting tomorrow, so I won’t make any speculation.”
