The new central bank boss said lenders could be asked to restrict borrowing terms or even be forced to hold more cash on their balance sheets to dampen down an over-heated property market.
His warning came as he also sought to reassure that interest rates were set to stay at record lows for at least three years as part of an effort to shore up his flagship ''forward guidance'' policy following a poor reception in the City.
In his highly-anticipated first UK public speech, Mr Carney insisted: "Rates won't go up until jobs and incomes are really growing.
"The knowledge that interest rates will stay low until the recovery is well established should give greater confidence to households to spend responsibly and businesses to invest wisely."
The guidance, set out earlier this month, contained a series of caveats that have prompted fears that the Bank Rate might rise sooner than expected - sending bond yields up.
He added the Bank stood ready to launch more economy-boosting measures if future rate expectations begin hindering the recovery.
Mr Carney, who succeeded Lord King at the helm last month, also unveiled new plans to bolster bank lending by another £90 billion.
Facing mounting criticism over stringent demands for lenders to bolster their financial reserves, Mr Carney said all banks and building societies that meet the new capital requirements will be allowed to reduce asset holdings elsewhere on their balance sheets.
This will reduce holdings by £90 billion once all eight major banks and building societies meet the capital rules.
"That will help to underpin the supply of credit, since every pound currently held in liquid assets is a pound that could be lent to the real economy," he told business leaders at a CBI event in Nottingham.
Mr Carney gave an upbeat view of the UK's economic prospects as he said there were signs the recovery is "broad based and set to continue".
But he warned there will still be "bumps in the road ahead", with emerging market economies under strain, some banks still needing to plug gaps in their finances and "uneven" progress in Europe.
And the UK economy is still lagging behind other countries, producing 3% less than it did five years ago, while Germany has grown by 2%, the US by 5%, Australia by 13% and China by more than 50%.
While the Bank's task is to "secure the fledgling recovery", he said this would not come at the expense of letting another credit and housing boom get out of control.
Fears of a property bubble have been fuelled as government initiatives such as Help to Buy, low interest rates and improved mortgage access, have sparked a bounce-back in the housing market.
Mr Carney said new powers handed to the Bank and its independent Financial Policy Committee mean it has the tools available to prevent another credit crisis developing, adding "we are now fully prepared to deploy them if that were needed".
The address to regional business leaders has been seen as an attempt by Mr Carney to go over the heads of City analysts and reassure over the Bank's recent actions, with forward guidance in particular top of the agenda.
After pledging to keep rates at the historic low of 0.5% until the unemployment rate falls from 7.8% currently to 7%, traders were quick to pick apart a series of caveats to the announcement.
These ''knockouts'' included a get-out clause if policymakers were to fear inflation reaching 2.5% or higher in the 18 to 24 months ahead - taking the City by surprise.
It meant that while forecasts for unemployment suggested rates would not rise until at least 2016, the market brought forward its expectations for a change to the middle of 2016.
Markets fell and yields on government bonds rose - the exact opposite of the effect Mr Carney would have wanted.
But Mr Carney used his speech to reiterate that rates will stay low, and in a rebuff to the stock market's reaction to his forward guidance policy, he said the actual Bank Rate was what matters to households and businesses.
He said: "Movements in longer-term market interest rates are certainly relevant, but what matters most to you is what actually happens to Bank Rate, now and in the future.
"That is because the interest rates on 70% of loans to households and more than 50% of loans to businesses are linked to Bank Rate."
He added: "Our forward guidance provides you with certainty that interest rates will not rise too soon.
"Exactly how long they stay low will depend on the progress of the recovery and in particular how quickly unemployment comes down."
If productivity is slow to pick up, unemployment may take even longer than three years to get back to 7%, meaning rates remain low beyond 2016, he said.
In a message to long-suffering savers, Mr Carney said they must accept shrinking returns on their nest eggs for the sake of a strong economy which will benefit their grandchildren
He expressed "tremendous sympathy" for those who had set money aside only to see earnings far below what they would have expected.
But he warned that following the Japanese example by lifting interest rates before the recovery is secured risked condemning the UK to "decades more of low interest rates and lost opportunities".