DHAKA: The possibility of Britain leaving the EU is the ‘biggest domestic risk to financial stability’, Bank of England governor Mark Carney has said.

He told the Treasury Committee that an exit vote could create economic uncertainty, although he added that remaining in the EU also carried risks.

Carney emphasized the Bank was not taking sides in the EU referendum, reports the BBC.

But Conservative MP Jacob Rees-Mogg accused him of making ‘pro-EU’ comments.

The governor told the committee that an exit posed the biggest ‘domestic’ risk in part because there could be uncertainty over such things as investment, household spending, and the impact on sterling.

Carney said, ‘It is the biggest domestic risk to financial stability. I would say that in my judgment the global risks, including from China, are bigger than the domestic risks’.

However, he told the committee that continued EU membership brought risks as well.

‘The principle risk - risks, I should say, because there are more than one - are associated with the unfinished business of European Monetary Union,’ Carney said.

Separately, in a letter sent to Treasury Committee chairman Andrew Tyrie, Carney said that Britain’s membership of the EU had reinforced the ‘dynamism of the UK economy’, and that the relationship had helped the UK to grow.

BDST: 1325 HRS, MAR 09, 2016
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