The Bank of England (BOE) announced this morning that Mark Carney will succeed Mervyn King as its Governor – the central bank’s highest position – in July of 2013. Carney’s term will run for five years.
Since February of 2008, Carney has served as the Governor of the Bank of Canada (BOC), the highest position in that central bank as well. Earlier in his career, he spent 13 years at Goldman Sachs – which many critics quickly pointed out brings the total number of Goldman alums and advisors that have held leading European governmental positions to nine, according to Zero Hedge.
Following Carney’s appointment, none other than Goldman Sachs weighed in with its thoughts on the news. In a note to clients, the firm wrote that “The news comes as a surprise. Although there had been some speculation that Mr. Carney might be a candidate prior to the selection process getting under way, the BoC Governor had indicated that he had not applied for the job. Of the five known candidates, Paul Tucker, one of two Deputy Governors at the BoE, was the strong favourite for the job.”
The firm added that “It is difficult to speculate on the policy implications of an appointment such as this, not least because Mr. Carney will have only one vote (of nine) on the MPC. But the BoC Governor has a reputation for being a policy pragmatist and innovator (under his tenure, the BoC was the first G7 central bank to introduce the conditional rate commitment in 2009).”
Nonetheless, Goldman went on to discuss an item that could have rather bullish implications for the price of gold: “Relative to the conservative approach towards credit easing that the BoE has adopted under Governor King’s stewardship, it is also possible that Governor Carney may be prepared to engage in more ‘unconventional’ forms of QE. Mr. Carney is also perceived in some quarters as being a dove, although this perception may simply be ‘state dependent’ (i.e. his relatively dovish stance reflected the weak state of the global economy during his tenure at the BoC).”