Monday, November 26, 2012
Carney takes us by surprise
Posted by David Smith at 04:30 PM
Category: Thoughts and responses


At a time when everybody was expecting Paul Tucker to be announced as Bank of England Governor, including me, I can draw two modest crumbs of comfort from this afternoon's announcement that it will be Mark Carney, Governor of the Bank of Canada.

The first is that in my piece on November 11 I said that Carney was still in the frame. The second was the conclusion of that piece: "The bookies are probably right to have Tucker as favourite. He remains the one to beat. But a credible dark horse, a genuine outsider, might be better."

Having said that, it is hard not to feel sorry for Tucker. To be a defeated favourite in such a public contest is hard. As for Carney, the key question will be whether his success as Bank of Canada Governor will translate into the much bigger job at the Bank of England. There are more differences than similarities.

Carney is who the Treasury wanted, and they pursued him doggedly. Sir Mervyn King said: "He represents a new generation of leadership for the Bank of England, and is an outstanding choice to succeed me. Since Mark became Governor of the Bank of Canada, I have worked closely with him and admired his contributions to the world of central banking, in which he is widely respected." He may have preferred an outsider to succeed him.

Charlie Bean will stay on as deputy governor with responsibility for monetary policy for another year, until mid-2014.