Category Archives: Carney’s Corner

Is Carney Going?

Zero Hedge has just reported on a Financial Times article: On The Goldman Path To Complete World Domination: Mark Carney On His Way To Head The Bank Of England?. ZH quotes the Times:

Mark Carney, the governor of Canada’s central bank, has been informally approached as a potential candidate to replace Sir Mervyn King as head of the Bank of England in June next year.

One of the world’s most respected central bankers, Mr Carney, 47, now heads the Financial Stability Board, which oversees global financial regulation. He was approached recently by a member of the BoE’s court, the largely non-executive body that oversees its activities, according to three people involved in the process.

Very rarely are national central banks headed by foreign citizens, with a notable exception being Stanley Fischer, the American appointed as Israel’s central bank governor in 2005. Naming a foreigner as governor of the 318-year-old central bank would break with tradition, although Mr Carney has a British wife, studied at Oxford university, and worked at Goldman Sachs in London early in his career. “As a Canadian national he is a subject of the Queen,” said one supporter. “That is important.”

One would think if Carney wants the job, it is his. But what a choice: governor of the central bank of an ex-colony or governor of the central bank of a failed colonial power. Our bet is on the latter if only for the challenge of trying to rescue a basket case. That would leave one remaining question: who would Goldman Sachs recommend to replace him at the BoC?


 

“A Monetary Policy Framework for All Seasons”

This commentary is in response to the speech titled A Monetary Policy Framework for All Seasons that Mark Carney presented to the U.S. Monetary Policy Forum in New York, Feb. 24, 2012. In this speech, he discusses monetary policy-targeting frameworks. He briefly examines the major ones and presents the Canadian context. This speech is a rework of the material found in the speech we reviewed in Carney’s Carnage but has some interesting points for discussion.

Carney’s Carnage

On November 23, Bank of Canada Governor Mark Carney gave a speech to the Board of Trade of Metropolitan Montreal titled “Renewing Canada’s Monetary Policy Framework“. We review this speech herein because it gives good insight into the bank’s policy decisions. Mr. Carney, according to his biography, spent 13 years with Goldman Sachs, the Great Vampire Squid (try and find a major global economic figure that hasn’t worked for GS). As a Harvard and Oxford graduate, he is also likely a Keynesian economist, but then what central bank governor isn’t.

Key extracts that we wish to comment on are:

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