Mark Carney, the Governor-elect of the Bank of England is the perfect hire for this Government.
Over the last two years, it has become increasingly evident that Chancellor George Osborne and Business Secretary Vince Cable have no policy at all in respect of banking.
The Conservatives have known all along what they want and need from our banking system, whereas Vince Cable has been reduced to delivering the odd grumpy sound-bite.
It’s been nothing more than window dressing.
Because of the symbiotic relationship between politicians, retired politicians and banks, they had to hire someone who would more-or-less preserve the status quo but who was also a major international player.
Mr Carney, a Goldman Sachs-trained Investment Banker is the exceptional candidate for the role……..as long as he delivers what Chancellor Gideon expects and doesn’t overdo the Bank of England’s “independence” bit.
We can forget Banking Reform (remember “firewalls”, “good banks”, “bad banks”, “Splitting the banks”, “Too big to fail banks” and all the other buzz phrases from the last four years?)
Forget them all.
Mark Carney is the current Governor of the Bank of Canada and as such, responsible for the Canadian Banking system which is considered to be the safest in the world. However, the Canadian Banking system is dominated by five main banks and most importantly, these banks are not just retail banks but they are Holding Companies which also control activities such as credit cards, brokerage, mutual funds, insurance etc.
That is probably the model which appeals to our Chancellor and the government – and, most importantly, which will require the minimum amount of “tweaking” of the British banking system.
The Coalition government had absolutely NO INTENTION of ever reorganising our banking system and is now able to say: “Let’s wait until the new Governor is in place.”
Meanwhile, because ALL regulation will eventually land in the Bank of England’s lap, we should expect the FSA to atrophy and die – as it has been doing since inception and anyway, Lord Turner stands absolutely no chance against this guy – with the added “frisson” of Turner having also applied for the BoE Governor job.
Here’s the Chancellor’s slightly overdone sales pitch:
“Mr Carney is unique amongst the potential candidates, in combining long experience of Central Banking, huge international credibility in economics, deep expertise in financial regulation and a first-hand experience of private-sector financial institutions.”
He wasn’t the exceptional candidate. He was the only candidate.