U.K. PM Starts Avalanche of Criticism Against BoE Governor Mark Carney
Despite perhaps being the most well respected central banker on the planet, Bank of England (BoE) Governor Mark Carney is coming under pressure to resign in the near term.
Some opponents claim he “politicized” his office during the run-up to Britain’s referendum on whether or not to stay in the European Union (EU). (Source: “Bank of England’s Mark Carney Faces Backlash From Brexit Backers,” The Wall Street Journal, October 30, 2016.)
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It was a key issue for the country, and Carney’s BoE research team issued some doomsday forecasts of what could occur in the event of a “Leave” decision. Critics say these morbid portrayals overstepped the central bank’s authority and independence.
Carney came under fire for these reports, but they did not seem to be a threat to his job. That is, they didn’t seem like a threat until this week, when U.K. Prime Minister Theresa May suggested that central bank policies (like easy money) hurt poor people the most.
May’s comments emboldened Carney’s other critics to come out of the woodwork. The calls for his resignation have risen to a crescendo ever since, with one British member of the European Parliament even saying that although Carney “seems a nice enough fellow,” he “should indeed resign.”
“He politicised his office inexcusably,” said the MEP.
But Carney doesn’t look like he’ll give up without a fight. He responded to May and his other critics by saying that he would not “take instruction” from politicians on how to do his job. “The objectives are what are set by the politicians,” said Carney. “The policies are done by technocrats.”
However, he did acknowledge there are other reasons he could leave the position. His four daughters are going through school and those family matters could sway his decision. “…[L]ike everyone, I have personal circumstances that I have to manage,” he told a parliamentary committee on October 25. “This is a role that requires total attention, devotion, and I intend to give it for as long as I can.”
While these particulars are what drove Carney to sign up for a five-year contract, he has an option to extend it to a full eight-year term. Several high-level policymakers have been trying to convince him to stay, especially since Brexit became a reality in June.
Considering that Britain’s separation from the EU starts in March 2017 and continues for two years thereafter, some worry that Carney’s absence would create too much uncertainty for markets. Carney is sure to weigh that in his decision, but it is unlikely he will pay any mind to the public calls for his resignation.
