Do not expect too much of Mr Carney

The 120th governor starts on Monday and brings with him the nation's high hopes

Share

Mark Carney has the central banking equivalent of rock-star status. When he joins the Bank of England as the 120th governor on Monday, he brings with him high hopes of a new radicalism at an already radically reshaped institution.

Not only has the Old Lady’s remit been vastly expanded by the creation of the Prudential Regulation Authority (which took over from the now-defunct Financial Services Authority in April). Mr Carney has also signalled his appetite for unconventional monetary policy, in particular the notion of “forward guidance”, to give interest-rate changes extra economic oomph. Cue much anticipation, from the Chancellor downwards.

Yet, for all the razzmatazz at the first changing of the monetary guard for a decade – and the first foreigner ever in the top job – it is as well not to become too starry-eyed. True, Mr Carney is credited with considerable successes during his governorship of the Bank of Canada. But while the Canadian economy did indeed weather the storms of the 2008 crisis better than most – avoiding bank bailouts and returning swiftly to growth – monetary policy can claim only some of the glory. The country’s healthier banking sector, sounder government finances and exposure to soaring global commodities prices were equally, if not more, influential.

By coincidence, Mr Carney comes to Britain just as global monetary policy is shifting. After five years of ultra-looseness, the tide is beginning to turn, and the question is no longer if money supplies will be tightened, but when.

The path will not be an easy one – as the markets’ flighty response to hints from Ben Bernanke at the US Federal Reserve this week makes clear. Mr Carney’s background working for Goldman Sachs may put him in a better position vis-à-vis banking regulation than his famously hostile predecessor. But his primary challenge will be the fine judgements about when to raise interest rates, and by how much.

Thus far, Mr Carney’s career has been marked by considerable good fortune. With the British economy showing signs of life at last – albeit tentative ones – perhaps his luck is holding. We can only hope so.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

General Cover Teacher

£120 - £125 per day: Randstad Education Luton: The Job:TEACHERS REQUIREDWe are...

Year 6 Teacher

£100 - £120 per day: Randstad Education Hull: Randstad Education are currently...

SEN Teaching Assistant

£60 - £70 per day: Randstad Education Leeds: Special Needs Teaching Assistant ...

Year 4 Teacher

Negotiable: Randstad Education Hull: Randstad Education is urgently recruiting...

Day In a Page

Read Next
 

Daily catch-up: Hislop the Younger, by-election polling and all about the olden days

John Rentoul
The bustling Accident & Emergency ward at Milton Keynes Hospital  

The NHS needs the courage to 'adapt and survive'

Nigel Edwards
How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

A crime that reveals London's dark heart

How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

Lost in translation: Western monikers

Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

Handy hacks that make life easier

New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

KidZania: It's a small world

The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker
Renée Zellweger's real crime has been to age in an industry that prizes women's youth over humanity

'Renée Zellweger's real crime was to age'

The actress's altered appearance raised eyebrows at Elle's Women in Hollywood awards on Monday
From Cinderella to The Jungle Book, Disney plans live-action remakes of animated classics

Disney plans live-action remakes of animated classics

From Cinderella to The Jungle Book, Patrick Grafton-Green wonders if they can ever recapture the old magic
Thousands of teenagers to visit battlefields of the First World War in new Government scheme

Pupils to visit First World War battlefields

A new Government scheme aims to bring the the horrors of the conflict to life over the next five years
The 10 best smartphone accessories

Make the most of your mobile: 10 best smartphone accessories

Try these add-ons for everything from secret charging to making sure you never lose your keys again
Mario Balotelli substituted at half-time against Real Madrid: Was this shirt swapping the real reason?

Liverpool v Real Madrid

Mario Balotelli substituted at half-time. Was shirt swapping the real reason?
West Indies tour of India: Hurricane set to sweep Windies into the shadows

Hurricane set to sweep Windies into the shadows

Decision to pull out of India tour leaves the WICB fighting for its existence with an off-field storm building
Indiana serial killer? Man arrested for murdering teenage prostitute confesses to six other murders - and police fear there could be many more

A new American serial killer?

Police fear man arrested for murder of teen prostitute could be responsible for killing spree dating back 20 years
Sweetie, the fake 10-year-old girl designed to catch online predators, claims her first scalp

Sting to trap paedophiles may not carry weight in UK courts

Computer image of ‘Sweetie’ represented entrapment, experts say
Fukushima nuclear crisis: Evacuees still stuck in cramped emergency housing three years on - and may never return home

Return to Fukushima – a land they will never call home again

Evacuees still stuck in cramped emergency housing three years on from nuclear disaster
Wildlife Photographer of the Year: Intimate image of resting lions claims top prize

Wildlife Photographer of the Year

Intimate image of resting lions claims top prize
Online petitions: Sign here to change the world

Want to change the world? Just sign here

The proliferation of online petitions allows us to register our protests at the touch of a button. But do they change anything?