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Power Player: Carney In No Rush To Change BOE

posted 7 Feb 2013, 06:29 by Mpelembe   [ updated 7 Feb 2013, 06:30 ]

Reuters Business  Report -  The Canadian due to take the helm of the Bank of England.

Mark Carney will become the first foreign Governor of the 318-year old central bank in July.

He denied he had other political ambitions.

 Mark Carney, Incoming Governor of the Bank of England

"I'm surprised that it would be suggested that taking one of the most challenging jobs in central banking in another country would be politically advantageous, would be viewed as politically advantageous in my home country."

Before he's even started the job, he was quizzed by British MPs about his pay packet, experience and plans for the UK's sluggish economy.

Carney will take over from Mervyn King - and hopes are already running high that it'll bring a new dawn for the Bank of England.

He played down speculation he'll push for big changes.

But he did tell lawmakers that any rethink of how British monetary policy is run should be made carefully, with any changes being looked at over time.

 Mark Carney, Incoming Governor of the Bank of England

"I start from a position where flexible inflation targetting in my opinion is the most successful monetary policy framework that has been in existence, and so the bar for change to that framework, the overall framework is very high. But I would note that there seems to be an appetite for some debate about what exactly the framework is, and what alternatives there could be to it."

Many believe Britain's Finance Minister has been disappointed with the Bank over the past few years, and Simon Derrick from Bank of NY Mellon says he might have brought in the Bank of Canada Governor to effect change.

 Simon Derrick, Head of Global Currency Research, Bank of NY Mellon

"Is he going to shake up what the Bank of England does? If given the mandate by the government, then yes, I think that is fair to say. I do suspect that we might see a change in mandate from the government, I suspect that debate is going on behind the scenes right now, although obviously we can't prove it."

Sterling rose after Carney's testimony and analysts will be watching closely to see how investors react once he takes the reins.

A day after the OECD suggested the UK might want to consider more quantitative easing, Carney stressed the risks of QE, but said Britain's weak economy might need monetary stimulus for some time.