A British survival guide for Mark Carney

Pamela Maynard and Pablo G  – HEAL OUR WORLD

A British survival guide for Mark Carney

By Philip Stephens

Financial Times – November 27, 2012

I am already feeling sorry for Mark Carney. His appointment as Bank of England governor has brought universal applause. A story that starts like this can only end in tears.

Politicians of all shades have lauded Mr Carney for intelligent judgment and proven management skills. Economists have attested that he can tell his algorithms from his algebra. Bankers say that, as a Goldman Sachs alumnus, he “understands” them. Put this another way: the three sets of people who got us all into this wretched mess are sure that Bank of Canada governor is the man to get us out of it.          

I have met Mr Carney only once – over lunch at the FT. He struck me as sharp and personable with a big-picture grasp of the causes and consequences of the financial crash. He was pessimistic before it was fashionable to be so. If truth be told, however, he did not immediately strike me as a messiah whose destiny was to lead Britain from the land of penury. I sort of assumed it was a bit more complicated than that.

The new governor’s problem now is that he is bound to disappoint. Unless by some miracle the British economy soon heads towards the sunlit uplands, those now so keen to lavish praise on Mr Carney will start asking whether Britain has got what it paid for. The media will ask awkward questions about his pay and perks; MPs will criticise him at once for not being tough enough on the banks and for choking off credit to small businesses.

So here, in the present spirit of goodwill, are three tips for Mr Carney when he moves into the BoE next summer.

Firstly, modernise. Sir Mervyn King has run the BoE as an 18th century monarch – a former Labour chancellor dubbed him the “Sun King”. Politicians and press will expect a more meritocratic style from a Canadian. It is time to say goodbye to the hordes of Threadneedle Street flunkeys in pink tailcoats and top hats, to open up the rarefied corridors of the governor’s office to the rest of the Bank, and to listen occasionally to colleagues. And no, you should not insist, as does Sir Mervyn, on being addressed as Mr Governor.

Secondly, never trust the Treasury. The BoE under its present management has got many – perhaps most – things wrong about the economy and financial system. The Treasury has got absolutely nothing right. That’s why the BoE sets interest rates and fiscal policy has been handed over to the Office for Budget Responsibility. Never mind. The self-regard of the Treasury’s top mandarins is never dented by its dismal record. They resent the BoE its power and its privileges. When things go wrong they will brief against you.

Thirdly, develop a thick skin. The newspapers that now describe you as a financial superman will soon enough be complaining about your housing allowance, digging into your private life and asking why the job had not been given to a Briton. Ask any one of the foreigner managers who have tried and failed to make a success of the England football team. MPs, who can never be accused of consistency, will demand to know why you are not delivering the monetary boost to the economy so foolishly promised by your predecessor. Best perhaps not to read the newspapers.

None of the above, of course, will make the job much easier. But then against present expectations, it is hard to imagine that even a messiah could succeed.


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