Blueprint for new BoE could start with rebrand
By Dominic Elliott and Christopher Hughes
The authors are Reuters Breakingviews columnists. The opinions expressed are his own.
Bank of England Governor Mark Carney has hired McKinsey and Deloitte to advise on strategy. Breakingviews imagines what the consultancies might recommend.
Proposal to Mark Carney on future Bank of England strategy
When we presented our deck to you last month, you asked us to dig deeper into the granularity of exactly how the Bank of England enterprise can improve its deliverables.
We’re pleased to say we’ve now finished extensive activity-based costing and strategic spine analysis of BoE operations. Based on our issue tree, here are the five key objectives that we believe should inform the basis of your KPIs to deliver your USP to your key stakeholders.
1. Rebrand as “Monetas”. “Bank of England” has been around 319 years. It feels dated. A name change signals to the world that you are serious about refreshing the enterprise and its culture. Monetas, a leading provider of end-to-end monetary and financial macro solutions, is the central bank for the Facebook generation.
2. Outsourcing of low-value-added functions. Interest rate setting should be a commoditised, data-driven process that can be better managed by a company like Infosys. Offshoring the writing of the inflation report would also enable the enterprise to downsize its cost base. Our modelling of the payroll reductions suggests a collateral deflationary benefit. Crucially, outsourcing would ensure that accountability for the accuracy of forecasts could be easily transferred.
3. Organisational change. We feel the Court of Directors would be better replaced with a steering committee in which there would be 360-degree accountability. We are concerned that the court is too detached from daily operations and recommend a team-building offsite where members can engage with each other and familiarise themselves with the full CRM chain.
4. Performance-based pay. There’s plenty of runway to develop the concept of Prudential Regulatory Authority employees being paid partly in high-trigger contingent convertible bonds issued by the banks they supervise. This would align their incentives with stable macroeconomic outcomes.
5. Real estate. We feel a tax-optimised sale and leaseback of your Threadneedle Street base would allow the enterprise to tap into the regional property bubble and prime central London’s status as a vault for foreign exchange reserves. You could save costs by relocating core functions to a new headquarters, Monetas Global Financial Centre, adjacent to the BBC’s new premises in Salford.
Best of luck with the Semi-Annual Review. And do let us know if you need any follow-on advice.
McKinsey and Deloitte