Sunday, April 19, 2009
Eddie George, 1938-2009
Posted by David Smith at 11:00 AM
Category: Thoughts and responses

eddie.jpg

The former Bank of England governor, who died on April 18 at the age of 70, could lay claim to have presided over one of the most successful periods in the Bank's long history. His tenure as governor, 1993 to 2003, was characterised by continuous growth and low and stable inflation. He, of course, was the first governor of an independent Bank.

He was always personally informal, preferring "Eddie" to "Sir Edward" or "Lord George" but was a fierce defender of the Bank's reputation, and of maintaining its high standards. It is interesting to speculate how he would have responded to some of the criticism faced by Mervyn King, his successor, in recent times. It is also interesting to speculate how he would have handled the banking crisis. Despite many requests, he always refused to go public with his views.

A couple of things that have featured in the obituaries deserve elaboration. My understanding was that his famous threat to resign in 1997 over Gordon Brown's decision to remove banking regulation from the Bank was based more on the manner of it, without consultation or pre-warning, than the decision itself. He accepted the potential conflict of interest between a "monetary policy" Bank and a regulator.

Did he acknowledge that the Bank deliberately stoked up the housing market, as some claim? Not in my view. He did say that the Bank acted to support domestic demand during a period of global economic weakness but that is a different thing. The Bank's announcement of his passing is here.