As Mark Carney has demonstrated, there are risks in mistaking central bankers for rock stars

There was a time, not so long ago, when central bankers were to be seen very occasionally, and almost as rarely heard. The banking crisis changed that

Share

This week, the Governor of the Bank of England ventured far beyond the Square Mile to give a speech in Nottingham – the city, as it happens, where I was born. Like a national leader, he was accompanied by a posse of journalists. Like a national leader, he gave a press conference after the main event, and – in a folksy touch, worthy of Bill Clinton and other Great Communicators – he talked exclusively to the local paper. After all, even the capital of the east Midlands does not host the country’s chief banker every day. 

Now it may be that it was the hoopla attending Mark Carney’s appointment that alone dictated the high profile he has subsequently enjoyed. George Osborne pulled off quite a coup when he told the Commons that arguably the world’s most respected central banker had reversed his initial refusal and agreed to become the first foreigner to take the top job. But it is not as if, since that announcement, Carney himself has exactly shunned the limelight.

He made a much-praised appearance before the exacting Commons Treasury Committee. He gives press conferences. On his first day at work, he joined commuters on the Tube. He and his (British) wife “chillaxed” earlier this month at the upmarket Wilderness Festival in Oxfordshire, where they have family connections. His sartorial choices are widely remarked upon, while his name is rarely mentioned in the media without the term “rock star” appearing nearby. One way or another, the Canadian is fast becoming a cult figure, at least on this side of the Atlantic.

But could there be more to his star status than an air of professional competence, a “cool” dress sense and a gift for presentation? And is it on his initiative, or ours, that he has acquired the aura he has?

There was a time, not so long ago, when central bankers were to be seen very occasionally, and almost as rarely heard. And when they did speak, the words were as Delphic as they could possibly be. The plain-spoken resignation of Rupert Pennant-Rea, after he admitted an affair conducted in part on Bank of England premises, was a colourful, and slightly shocking, exception. That was 1995.

But anonymity, or something close to it, was to remain the norm for at least another decade, and not just in Britain. As chairman of the US’s Federal Reserve, Alan Greenspan came to be revered as the wizard binding the spell of the American boom, and it was not only the markets which hung on his every word. But it was the presumed results of his direction, not his appearance or character, that made his name.

Indeed, much of his influence lay in what was not known about his thought processes; it lay in the mystique. It should also be recorded that he retired (at the age of 79, two years before Lehman Brothers filed for bankruptcy) just in time to escape the consequences of his own irrational exuberance. 

Also from the late 1990s, I recall annual press conferences at the Bank of France. An even more understated magician, in the most stylish of suits, walked the length of the bank’s intensely gilded hall, to deliver his characteristically elegant account of his year’s work. Like Greenspan and other central bankers of the time, Jean-Claude Trichet was not the household name he later became. At the time, it was the office and the institution that bestowed their lustre on him.

Trichet’s evolution from cypher to character – when he moved to the European Central Bank, steering it through the global financial crisis and the early stages of the euro’s meltdown – exemplifies the change. In the space of just a few years, the man running the bank became better known than the institution. For decades – centuries, perhaps – it had been the other way round. In those years of banking crisis, between around 2007 and 2010, Jean-Claude Trichet had lost his anonymity; his name and his appearance were widely recognised. He was Europe’s banker, an elite civil servant in the classic French mode, and he inspired trust in millions of ordinary individuals who might have had only the sketchiest idea about the role of the ECB.

Trust is probably the key here. As institutions proved fallible, public confidence passed to individuals – or not, as the case might be. The central banker became a public figure and it suddenly mattered much more who he was and how he presented himself. Trichet’s successor at the ECB is a case in point. Would the single currency be as relatively stable as it looks today if Mario Draghi had not promised a year ago, in public, to do “whatever it takes” to save the euro? And not only said that, but – far more important – been believed?

This new responsibility for central bankers – to be out there and to inspire confidence – may be a product of the media age or the global financial crisis, or probably a combination of both. But it makes the appointment of a new central banker a matter for public engagement in a way it never really was. The question of who was to succeed Mervyn King was discussed far beyond political and banking circles. The merits of runners and riders were subject to intense, and unprecedented, scrutiny, as was the basic principle: what is a central banker for? That is, in part, how it became acceptable to consider a foreigner for what is a quintessentially national job.

From Russia, where a woman – Elvira Nabiullina – has been running the central bank for the past year, to India, where Raghuram Rajan, a former IMF chief economist who called the financial crisis correctly, now has the task of keeping this vast emerging economy afloat, to Germany, where the President of the Bundesbank, Jens Weidmann was, somewhat to his own surprise, keynote speaker at this week’s ambassadors’ conference, central bankers are being coaxed into the wider world. 

But, as always, it is in the United States – where President Obama must decide imminently whom he wants to succeed Ben Bernanke at the Fed – that the change is most striking. The contest has shaped up as a duel between the former Treasury Secretary and academic, Larry Summers, and Bernanke’s current deputy, Janet Yellen, though a dark horse candidate is not excluded. As in Britain, the discussion transcends the boundaries of banking and politics. Fierce advocates have sprung up on both sides: East Coast against West Coast; academics against auditors; men against women. And again, the key is not just banking competence, and who foresaw what as the financial crisis brewed, but the capacity to inspire public trust.

Mark Carney is certainly making the Bank of England a more open and interesting place. He has the Chancellor’s ear. He has impressed MPs with his straight-talking competence, and members of his Nottingham audience described him as “a thoroughly nice bloke”. But in Britain, as elsewhere, it is early days for the central banker as communicator, and confidence can be lost far more easily than it is won. After all the buffeting from austerity and crisis, the public cannot but yearn for a central banker who cuts a convincing figure on the national stage and sounds as though he knows what he is doing. But the rock star-like adulation that has marked his extended British honeymoon risks setting him up to fail.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
iJobs Job Widget
iJobs General

Recruitment Genius: Office / Sales Manager

£22000 - £32000 per annum: Recruitment Genius: Established and expanding South...

Recruitment Genius: Administrative Assistant / Order Fulfilment

£14000 per annum: Recruitment Genius: An exciting opportunity to join a thrivi...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: Trainee Recruitment Consulta...

Day In a Page

Read Next
 

Syria's Kurds have little choice but to flee amid the desolution, ruins and danger they face

Patrick Cockburn
A bartender serves two Mojito cocktails  

For the twenty-somethings of today, growing up is hard to do

Simon Kelner
Refugee crisis: David Cameron lowered the flag for the dead king of Saudi Arabia - will he do the same honour for little Aylan Kurdi?

Cameron lowered the flag for the dead king of Saudi Arabia...

But will he do the same honour for little Aylan Kurdi, asks Robert Fisk
Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Our leaders lack courage in this refugee crisis. We are shamed by our European neighbours

Humanity must be at the heart of politics, says Jeremy Corbyn
Joe Biden's 'tease tour': Could the US Vice-President be testing the water for a presidential run?

Joe Biden's 'tease tour'

Could the US Vice-President be testing the water for a presidential run?
Britain's 24-hour culture: With the 'leisured society' a distant dream we're working longer and less regular hours than ever

Britain's 24-hour culture

With the 'leisured society' a distant dream we're working longer and less regular hours than ever
Diplomacy board game: Treachery is the way to win - which makes it just like the real thing

The addictive nature of Diplomacy

Bullying, betrayal, aggression – it may be just a board game, but the family that plays Diplomacy may never look at each other in the same way again
Lady Chatterley's Lover: Racy underwear for fans of DH Lawrence's equally racy tome

Fashion: Ooh, Lady Chatterley!

Take inspiration from DH Lawrence's racy tome with equally racy underwear
8 best children's clocks

Tick-tock: 8 best children's clocks

Whether you’re teaching them to tell the time or putting the finishing touches to a nursery, there’s a ticker for that
Charlie Austin: Queens Park Rangers striker says ‘If the move is not right, I’m not going’

Charlie Austin: ‘If the move is not right, I’m not going’

After hitting 18 goals in the Premier League last season, the QPR striker was the great non-deal of transfer deadline day. But he says he'd preferred another shot at promotion
Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones