When Mark Carney, the respected head of Canada’s central bank, was appointed on Monday to the even more august position of governor of the Bank of England, Britain’s reaction was a characteristic blend of self-deprecation and smugness.
The self-deprecation was publicly expressed by an Opposition MP, Barry Sheerman: “Isn’t it a little surprising that the leading banking nation on earth could not find a British candidate for the job?” This feeling of mild embarrassment seemed to be quietly shared by many Britons in addition to the distinguished domestic candidates who were passed over.
The smugness has been much more in evidence. There has been a veritable orgy of self-congratulation among British politicians, media commentators and financiers at having nabbed “the outstanding central banker of his generation,” as George Osborne, the British chancellor, described his new hire. Embarrassment and praise are both justified, but for other reasons.
Starting with the embarrassment, there was actually no shortage of outstanding British candidates to run the BoE. All four Britons who publicly revealed their interest – Adair Turner, Paul Tucker, Terry Burns and John Vickers – have credentials that easily match Carney’s and would have put them in the top league of global central bankers alongside Ben Bernanke and Mario Draghi. This appointment, therefore, was definitely not an example of the “Wimbledon syndrome,” whereby Britain hosts the world’s best tennis tournament but never produces a player who is good enough to win.
Why, then, did Osborne go to Canada to fill the BoE post? The reason, and the true cause for British embarrassment, is the failure of Osborne’s economic policy, for which Sir Mervyn King, the departing governor, will now become a useful scapegoat.