Carney leads the way on banking changes

By Alex Brummer, September 13, 2013
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Bank of England governor Mark Carney (Photo: Jolanda Flubacher)

Bank of England governor Mark Carney (Photo: Jolanda Flubacher)

New Bank of England governor Mark Carney has made a positive impact on the UK economy.

The Canadian-born banker and chairman of the G20 Financial Stability Board has shifted the focus from inflation to growth.

When I interviewed Carney he made it clear that interest rates would remain at record low levels for ordinary households and smaller businesses.

He clearly wants to encourage consumers and smaller enterprises to invest and help restore Britain’s economy to its position before the 2008 financial crash.

He openly said that the UK “endured its weakest recovery on record”.

While the German economy grew by 2 per cent, the US by 5 per cent, Australia by 13 per cent and China by 50 per cent since 2008 — the British economy sunk by 3 per cent over the same period.

Carney now has the tools to deal with low interest rates via the Bank’s new Financial Policy Committee.

It can intervene with high street banks and order limits on lending.

The person entrusted with running the financial stability arm is Sir Jon Cunliffe, an Anglo-Jewish former Treasury boss who currently heads Britain’s diplomatic mission to the European Union.

The Middle East expert has worked with Ed Balls to improve economic conditions in the West Bank and Gaza.

Britain is not the only place where bank leadership is about to change.

The head of the Federal Reserve Ben Bernanke, credited with having recovered the global economy from the economic brink, is expected to step down from office early next year.

This would give US President Barack Obama the chance to appoint a Democrat to the job following the years when the department was headed by Republicans Alan Greenspan and Bernanke.

Bernanke has eased the way for his successor by signalling an end to the period of “quantitative easing”.

Favourite to succeed Bernanke is the former Treasury Secretary Lawrence Summers, a distinguished Harvard academic and nephew of Nobel Prize winning economist Paul Samuelson.

His main rival is seen as deputy Fed chairman Janet Yellen. She suffers the disadvantage of being a number two in a job where deputies have rarely succeeded to the top pot.

But we should never underestimate President Obama’s tendency to surprise when it comes to vital jobs.

Alex Brummer is City Editor of the Daily Mail

    Last updated: 3:45pm, September 13 2013