In Depth

Five suggestions for Mark Carney on first day at BoE

Can the 'rock star' Canadian overcome bank's 'stodgy' culture and revitalise the UK economy?

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MARK CARNEY begins his new job as Bank of England governor today and there's no shortage of people offering advice to the 'rock star banker'. But what challenges will the 48-year-old Canadian face as he settles in behind his new desk in Threadneedle Street? He has to get used to the BoE's way of doing things. Carney would have realised he has entered a different world the moment he was ushered past the bank's doormen, who wear top hats and pink jackets. The BoE can appear to outsiders a "rather stuffy, old-school institution", says the BBC.  David Blanchflower, a former member of the bank's Monetary Policy Committee (MPC), describes the atmosphere as "stodgy" and says unwritten rules such as not removing your jacket at meetings unless the governor does so will be alien to Carney. "Whether he adapts to the Bank's culture or it adapts to him will be important. No doubt a balance will be struck, but Blanchflower believes the new governor will have to draft in his own people and 'start cracking heads'," the BBC adds.

He has to hit the ground running. The former Bank of Canada governor will be "thrust straight into the policy maelstrom", says The Independent. This morning he'll attend a pre-briefing for the MPC – the body that sets interest rates – before chairing a full meeting on Wednesday. He'll have to overcome some opposition. Carney is believed to favour more quantitative easing to help the UK economy reach the "escape velocity" that will allow it to shake off the financial crisis for good. In his old job, that would have been his call alone. But as head of the BoE he has to persuade the nine-member MPC to follow his lead. Six of them are currently blocking more QE because they fear it will cause inflation to rise, so Carney's "powers of persuasion will be put to the test", Patricia Croft, former chief economist at the Royal Bank of Canada, told The Guardian.   He'll have to filter the deluge of advice. Everyone has an opinion on what the new governor should do. Yesterday the British Chamber of Commerce urged him to support an investment bank with central bank funds. The New Economics Foundation wants him to set up an offshoot of the MPC to consider direct investment in housebuilding through the bond market. Croft believes he'll make his own decisions, adding: "I have no doubt Carney will succeed if the UK lets him." He'll need to get results sooner rather than later. When chancellor George Osborne called Carney the "outstanding central banker of his generation" he cast the Canadian as the saviour of the UK economy. The big question is: can he deliver? Opinion is divided on this issue. No one doubts Carney's abilities, but the size, complexity and unbalanced state of the British economy presents a far greater challenge than the new governor faced in his homeland. Writing in The Guardian, Philip Inman asks: "Will Carney match his undoubted finance skills with a magician's ability to turn rabbits into doves, or will the former Goldman Sachs banker find himself, like the Wizard of Oz, furiously pulling levers to no great effect?"

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