The case against Carney: is ex-Goldman Sachs man tainted?

Nov 27, 2012

Dissenters say Carney at the Bank of England means its business as usual for the City

OOPS! Is Mark Carney not a saint after all? Amid the cacophony of praise for the new Governor of the Bank of England, there are some voices of dissent emerging.

"Be very afraid," writes Ann Pettifor in The Guardian. "Business-as-usual will prevail. And nothing will be done to constrain the City, and therefore to prevent the next collapse of the financial system."

Pettifor explains that Carney worked at Goldman Sachs for 13 years before becoming Canada's central banker. Although he has called the anti-corporate greed Occupy movement constructive, "there is nothing in his speeches that indicates that he will help give Britain's real economy the protection it needs from its over-mighty - and still very dangerous - banking sector".

The Independent is also concerned about Carney's past, noting that his appointment sends out the message that a "banker's banker" was wanted.

"One key question is whether [Carney] will be able to keep the necessary distance from his old industry, and not all the signs are good. He seems less demanding than some on the ring-fencing that banks should observe between the different parts of their business."

Canadian journalist Martin Barradaux lays out the case against Carney in City AM. "He's left behind the largest pile of Canadian personal debt on record and the brewing ingredients of a housing bubble some say could pop at any moment. He's been criticised for trying to use bank rhetoric to anchor inflation expectations but failing to hike interest rates for fear of inflating the Loonie [the Canadian dollar] and blunting the international competitiveness of Canadian exports."

Barradaux also argues that Canada's "pristine record for financial market probity" cannot be attributed to the Bank of Canada's governor, but owes more to the protective instincts of the Federal government in Ottawa and the province of Ontario, home to the city of Toronto and the country's biggest banks.

So, the idea that he can replicate his success in Britain is fanciful. "Canada's financial services industry is tiny when compared to the global powerhouse that is London."

Canada has benefited from its neighbour and biggest trading partner - the United States - growing at two per cent. Britain's neighbour and chief export destination, the Eurozone, is sinking into recession.

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