Carney Will Spell Out Strategy as He Pushes BOE RevampScott Hamilton
Mark Carney will unveil the results of his McKinsey & Co. review of the Bank of England tomorrow, using a platform that’s previously seen his predecessors and U.K. chancellors set out their visions.
The governor will speak at the annual Mais Lecture in London’s financial district, an event that’s hosted every BOE governor since it started more than three decades ago and heard finance ministers lay out their ambitions for markets and the economy. He will use the occasion to lay out the next stage of his radical revamp of the three-century-old institution.
Carney, who turned 49 yesterday, overhauled the bank’s monetary-policy framework last year before bringing in the U.S. consultants to review the institution’s strategy. Among the priorities are the integration of new regulatory powers, improving governance and allowing more delegation by the governor and deputy governors. As he pushes his makeover, he’s also having to defend the reputation of the BOE after it became ensnared in a currency-rigging scandal.
“As far as the City goes and monetary policy, the Mais Lecture is right up there,” Forrest Capie, who co-edited a collection of addresses from the event, said in a telephone interview. “The speeches given by previous governors have been quite definitive in the strategy of the bank.”
The lecture, hosted by City University London’s Cass Business School, has become a set-piece event for policy makers, with BOE Governor Gordon Richardson addressing the first Mais in 1978. He was followed by figures such as Geoffrey Howe and Nigel Lawson, chancellors of the exchequer under Margaret Thatcher.
In 2010, when he was the opposition finance minister, George Osborne used his delivery to set out details of his deficit-cutting proposals before the general election that year.
BOE Governor Eddie George used the platform in 1997 to reflect on the central bank’s recent independence and warn about the risks of joining the euro. Carney’s predecessor, Mervyn King, made the address in 2005, defending the inflation-targeting regime he helped to set up at the bank in the 1990s.
The current governor made the strategic review one of his priorities when he took over the BOE. It will guide “investment decisions, working methods, and allocation of time and resources.” Carney also brought in Deloitte LLP to examine costs and announced as many as 100 job cuts in January. He said last week the BOE will add a fourth deputy governor for banking and markets.
Tomorrow’s event is scheduled to begin at 5:45 p.m. and Carney will take questions after the speech. He said last week that the BOE review will have “a series of measures to reinforce some of the positive cultural changes that have happened in the institution -- more open, more accountability.”
“It’s early on in his governorship and the opportunity for him to set out his thinking,” said Capie, a professor at Cass. “It looks like somebody who wants to get out there and use the best platforms available to tell us what he’s up to.”