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

Recruitment Genius: Sales Administrator - Spanish Speaking

£17000 - £21000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - German Speaking

£17000 - £23000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Sales Administrator - Japanese Speaking

£17000 - £23000 per annum: Recruitment Genius: If you are fluent in Japanese a...

Recruitment Genius: Graphic Designer - Immediate Start

£16000 - £25000 per annum: Recruitment Genius: This is a fantastic opportunity...

Day In a Page

Read Next
 

Forget charging by the page - with books, heart matters more than heft

Katy Guest
Nai or Oxi: whether Greece says Yes or No today its citizens will continue to struggle  

Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy

Rupert Cornwell
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'