IS MARK CARNEY REALLY SUPERMAN ?

Speaking of the appointment of Mark Carney as the next Governor of the Bank of England, George Osborne described the man as being the "outstanding central banker of his generation". Even allowing for the usual hyperbole that issues from the mouths of politicians at such times, this was extreme and will undoubtedly open Osborne up to potential career meltdown in a few years time if his words prove inaccurate.

Carney has previously been the top man in the Canadian central bank and has gained a serious reputation; he's credited with guiding Canada through the last few years of economic turmoil in a relatively successful way although there also seem to be some who claim that his policies have laid the ground for much more turmoil ahead. Having made it very clear that he had no ambitions to take on the job at the Bank of England, his arrival there next year might suggest that he knows full well that there are choppy waters ahead in his home country and he's getting out now before things begin to turn bad. Who knows ?

Canada's economy is about ¾ the size of the UK's and its population is a little more than ½; it is heavily dependent on its trading links with the USA. It's a huge nation covering a vast area much of which is sea and ice, and is a very different country overall from the UK; its wide open spaces yield some of the world's greatest volumes of oil, natural gas, timber and agricultural products, while mining of important metals and minerals is another major part of the economy. None of this is replicated in the UK.

Carney's credentials as a brilliant central banker may or may not be justified but what is clear is that his record has been earned in a very different world from that he will find in the UK. In Canada he has maintained very low interest rates while pumping large amounts of credit into the financial system, similar to the approach adopted in the UK but with, apparently, far better results. Whether this was a consequence of banking skill or of the different financial and banking regulatory framework in Canada is open to question.Nonetheless, Carney has been fêted around the world and comes to the UK with huge kudos attaching.

 

If he succeeds, he will leave the UK in 5 years time with his reputation enhanced and George osborne will emerge as the man of genius who appointed him. If he fails, he will still leave with a lot of money and will undoubtedly find another well paid job, while Osborne will have watched his career and ambitions to be Prime Minister run away down the drain. The rest of us just have to sit and hope.