Carney takes over at the Bank of England
Mark Carney has started his five-year term as the Governor of the Bank of England after Sir Mervyn King stepped down from the position on Friday.
The Canadian is the first foreign governor in the central bank’s 319-year history and will take responsibility for turning Britain’s tepid economic growth into a fully fledged recovery. Described by Chancellor George Osborne as “the outstanding central banker of his generation”, Carney is expected to radically change the way the bank - affectionately dubbed the Old Lady - will operate. Choosing to take the Central Line to work over a state-paid chauffeur, he has already started to distance himself from his predecessor.
Who is Mark Carney?
Ex-Goldman Sachs, Alberta-born Carney draws far more differences than similarities to the outgoing Sir Mervyn. Graduating from Harvard in 1988 and going on to receive a MPhil in economics from Oxford, he has always had an affinity with Britain. After spending five years as Governor of the Canadian Central Bank, navigating the country seamlessly through a global financial crisis that crippled many other G20 economies, he arrives in the UK with celebrity kudos, and with a new remit of recovery over stability.
What can we expect?
Carney’s appointment is a break with tradition in many ways. Likened more than once to Hollywood actor George Clooney, the press are already describing him as the “film star” central banker as he takes the reigns at Threadneedle Street with more power bestowed on the institution than ever before.
It is widely believed that Carney will radically change the way the bank operates. Indeed, his propensity to overhaul established processes may have been the reason Osborne originally persuaded him to make the jump across the Atlantic. Under Carney, the bank is expected to become less autocratic and take a more open approach to the media than before. He is also expected to give increased guidance about the direction of interest rates and monetary policy to boost transparency and help markets plan more accurately.
Although there is some division among analysts as to how he will act first, what is certain is that he will have more powers at his disposal than ever. Whether this means more quantitative easing, greater credit easing or loosening of macroprudential tools is unsure, but hard-line measures can be expected as the governor prepares for five years of change.
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