Mark Carney, the first non-British governor of the Bank of England, took over his new post as the estimable Mervyn King retired after ten years of service – and immediately, the Canadian sailed into trouble and embarrassment.
Yes, Carney unwisely decided to take the Central Line to work, whereas his predecessor always came in a car – and he was forced to ask for directions from the station to his place of work. Oops
It got worse. No sooner was the poor man at his desk, “very excited about getting started,” than he was besieged by campaigners urgently demanding to know which women ought to feature on British banknotes, after Winston Churchill takes over the real estate on the five pound note from Elizabeth Fry in XX. Under the present plans there’s an all-male line-up.
More serious, perhaps, are the questions as to how the new man will run the BoE’s operations. Carney is known to be no lover of King’s quantitative easing programme, which injected a total of £375 billion into the economy over a five year period. And there’s a general expectation that he’ll want to match Ben Bernanke at the Fed by slowing and then cancelling the bond buybacks.
That might be a harder job than he’s faced in the past, though. Mr Carney is widely respected for his work at the head of the Canadian central bank – Canada having been the only G7 nation that didn’t have to bail out any of its banks. But Canada was boosted for much of that time by soaring prices for its mining products, and unlike Britain it wasn’t weighed down by a millstone of government debt. Life at the BoE is likely to run on a different mechanism.
Mr Carney will also need to demarcate his role within the country’s political structure. The Bank of England has been independent of the Treasury since 1997, but Mr King had frequently annoyed Chancellor George Osborne with what were regarded as intrusively political observations about the government’s fiscal and economic strategy. Osborne has called Carney “the outstanding central banker of his generation”. Let’s see how that relationship works out when the going gets properly tough.