Britain has a new central bank chief. Mark Carney, the former head of the Canadian Central Bank, takes over the running of the Bank of England today.
Sleek and good looking — he is said to resemble George Clooney — Carney is being treated like a film star in the United Kingdom.
“I think we are enthusiastic about him for all the wrong reasons,” says Andrew Hilton head of the Centre for the Study of Financial Innovation. “Carney is young, he’s pretty, and he handles public relations very well.”
The Canadian has certainly bowled over the star-struck British government which decided — for the first time in British history — to recruit a foreigner to run Britain’s central bank.
“It is a baffling decision,” complains Edward Hadas of Reuters Breaking Views. “One would think there are many qualified British people who could do the job. It’s not really obvious that Mark Carney is the greatest central banker in the world. Canada did make it through the financial crisis largely unscathed, but Carney cannot be given the credit for that.”
And yet many Brits are swooning over their glamorous new central banker and, after more than four years of stagnation, they are pinning their hopes of economic revival on him. Time for a reality check: Andrew Sentance of the PwC accounting firm points out that Carney can’t work miracles.
“There aren’t any magic buttons or special levers that he can pull, and there may be too much expectation that he can change things dramatically in the economy when he can’t,” Sentance says.
Britain’s new central banker faces a gruelling task: he must unwind the money-printing program that has left the Bank of England holding more than half a trillion dollars worth of British government bonds, one third of the United Kingdom’s entire national debt. And Carney will eventually have to preside over the tricky decision to raise British interest rates.
“It’s going to be a very difficult transition from this period of extraordinary, all time low interest rates to normality,” says Andrew Hilton.
Mark Carney’s film star status in Britain seems unlikely to last.
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