The Great Debate UK
In the aftermath of Liverpool and Uruguay footballer Luis Suarez biting an opponent yet again, and with such aggression that he scarred the player’s arm and hurt his own teeth, FIFA has banned him for nine games, and psychologists are trying to justify his behaviour by saying that Suarez must have been humiliated and frustrated in his youth. I, in contrast, am asking whether Mark Carney and co. should learn to be a little more like Suarez?
If you asked someone to list the chief qualities needed to be a good central banker I assume that the list may include: good communicator, wise, attention to detail, clear thinking, credibility, and good with numbers. However, in recent months these qualities have been sadly lacking, most notably last week when the Federal Reserve wrong-footed the markets and failed to start tapering its enormous QE programme.
We are at the stage of the financial cycle where central banks turn into circuses and central bankers become the circus performers. The market is transfixed by the show, watching every move and trying to anticipate what trick or shock will come next.
The new governor of the Bank of England has shaken things up at the Old Lady. Not only has he brought a touch of glamour to the Bank, he is considered a George Clooney look-alike by some, but he has dramatically altered the way that the Bank does things. Since he arrived a little over a month ago we’ve had statements released after meetings and now the Bank has adopted forward guidance.