God Save the Empire: UK's Canadian BoE Guv'nor

♠ Posted by Emmanuel in , at 11/28/2012 05:49:00 PM
 To be sure, outgoing Bank of England Governor Sir Mervyn King has a number of things going for him in my book. He was a longtime LSE professor before giving up his teaching position for a higher calling. He is also a long-suffering Aston Villa fan as our team battles to save itself from the ignominy of relegation. (Since the Premier League started, Aston Villa has never been demoted to the second division, but this year it's well and truly in the relegation zone.) That said, let's just say that during his time at the venerable BoE, many did not cotton up to his uppity ways. Philip Stephens of the FT had this to say about Merv's tenure:
Firstly, modernise. Sir Mervyn King has run the BoE as an 18th century monarch – a former Labour chancellor dubbed him the “Sun King”...It is time to say goodbye to the hordes of Threadneedle Street flunkeys in pink tailcoats and top hats, to open up the rarefied corridors of the governor’s office to the rest of the Bank, and to listen occasionally to colleagues. And no, you should not insist, as does Sir Mervyn, on being addressed as Mr Governor. 
To make a sporting analogy of the sort Merv would probably approve, I understand that Aston Villa has its faults despite having a storied history including winning a European championship way back in 1982. Still, you cannot live off days of wine and roses long past. Why should a team with such a large payroll be fighting for survival? In that way Mervyn King and his country are a lot like his team: trading on past glories and failing to keep up with the times alike the political currents that ebb and surge. In other words, the UK was due for a change.

And what a change it is! Mark Carney is the outgoing Bank of Canada governor--and a highly lauded one he is, being named one of the world's top central bankers in 2012. From his perspective, where else can you go having won the top accolade of your profession? Well I suppose he's done a Jose Mourinho and traded up to what I consider the third biggest show of them all after being Fed or ECB chairman: BoE governor...or guv'nor in British slang meaning "the boss."

It's all hand on deck now as Her Majesty has recognized the direness of Britain's economic situation. Will Britain suffer a downgrade from AAA alike the US and France? Heaven forbid. Searching all of her dominions (upon which the sun never set in days gone by), the selection committee chose...a Canadian. But wait, he does have a British wife and wishes to be naturalized besides:
Born in Canada, the 47-year-old intends to bring his British wife and four children to the UK and apply for citizenship. But he rejected the Treasury's stipulation that the new governor serve for a single eight-year term in favour of a contract that runs for only five years...

City analysts said that while they were surprised by the appointment, Canada's ability to survive the financial crash had boosted the status of its central bank boss. His promotion last year to head the G20 financial stability board, which is charged with forcing the world's major banks to agree and implement global standards, also elevated him to the top rank of financial regulators.

Carney said he had strong ties to the UK, not only through his wife's family, but also from working here for a decade and making contacts with UK businesses and financial institutions over recent years. He said: "I think I can play a constructive role in relaunching the institution in its new role in promoting financial stability and the regulation of financial services."
Actually, there is precedent for nationality-hopping among elite central bank governors. Carney's cohort in the 2012 best bankers in the world list is Stanley Fisher of Israel. Formerly, Fisher was first deputy managing director at the IMF--the #2 job at the IMF customarily taken by an American since the #1 was of course European. In 2005, however, he renounced his American citizenship (a really good idea) for an Israeli one (but the jury is still out on this move). 

At any rate,  it's the moment of truth for crown and country as the UK struggles to keep its place at the head of the sovereign credit ratings table and as its moribund economy continues to baulk. Kudos though to the selection committee--they could not have chosen a better person for the job. Godspeed, Mark Carney, and remember:

There will always be a Bank of England.