Carney set to issue fresh bond liquidity warning

Results of six-month investigation

The Bank of England's financial policy committee(FPC) will meet this week to discuss the results of a six-month investigation into bond markets, which is likely to lead to further concerns being raised about liquidity in the sector.

The Sunday Times reports BoE governor Mark Carney is set to warn again this week of a damaging liquidity crisis in the government and corporate bond markets. Could lack of bond liquidity be the 'straw that breaks the camel's back'? It follows a recent report into the issue by the FPC - set up to monitor systemic risks in the financial system - which could result in policy changes. Last month it was reported Carney had asked 135 of Britain's biggest fund managers how they plan to cope in a situation where investors pile out of bond funds at the same time, especially when interest ra...