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10 questions MPs should ask Mark Carney

Sam Dale MM blog

Chancellor George Osborne shocked the House of Commons in November when he appointed Bank of Canada governor Mark Carney as the next Bank of England governor.

Since his appointment politicians and economists have been scrutinising his every utterance to work out what kind of governor he will be.

With control over monetary policy, financial regulation and economic stability, he will be the most powerful unelected official in Britain.

Tomorrow morning, for the first time since his appointment, he will face a grilling from MPs in the Treasury select committee.

The TSC has no formal power of veto of the governor but a critical response from the influential body would be damaging to Carney.

Here are 10 questions TSC chair Andrew Tyrie and his colleagues should ask him:

1. Should the Bank of England target GDP growth?

In December, Carney gave a speech in Toronto that said in “exceptional” circumstances central banks should target growth instead of inflation. The Bank of England currently has a 2 per cent inflation target and the governor must write to the chancellor if he misses it by more than 1 per cent.

2. Can the Bank do more than the funding for lending scheme to boost the economy?

The funding for lending scheme has been criticised by the TSC and business secretary Vince Cable for not increasing SME lending enough. FSA chairman Lord Adair Turner argues that the Bank can print money to fund Government spending. Monetary policy committee member Adam Posen believes quantitative easing money should be invested in areas such as housing and not just gilts.

3. Should the Bank launch another round of quantitative easing?

The Bank has launched £375bn worth of QE since 2009, with some MPC members calling for further rounds. Concerns have been raised about QE creating a bubble in gilts, hitting pensioners and storing up trouble for the future when it needs to be wound down.

4. How do you justify your £874,000 pay package?

Carney will receive £480,000 in basic pay, £250,000 in housing allowance and pension contributions worth £144,000, along with free health and dental insurance and a chauffeur-driven car. Current governor Sir Mervyn King is paid £304,000 alongside an incredibly generous Bank pension scheme that is now closed.

5. Will you hold too much power as governor?

With such a wide array of powers the new role has been called the most powerful central banking job in the world. The TSC will be keen to find out how Carney will delegate powers and manage such a huge portfolio.

6. Should the Bank be made more accountable?

The passage of the Financial Services bill through parliament saw fierce debate on the accountability of the Bank. The TSC called for the court of the Bank to be an expert supervisory board with the power to publish report and for the chancellor to have powers to direct the Bank in times of emergency.

7. How will you manage the new regulators, the FCA and PRA?

Carney will have ultimate control over the Financial Conduct Authority and Prudential Regulation Authority, which come into being in April. He will have a major role in setting the tone of the new regulators.

8. Do the Government’s banking reforms go far enough?

The banking reform bill, published this week, ring-fences banks’ retail arms from their investment divisions. The rules do not come into force until 2019. Carney plans to leave the Bank in 2018.

9. What will be the key threat to UK financial stability over the next five years?

The Financial Policy Committee, chaired by the governor, will have the job of preventing the next financial crisis. It will have a range of significant powers such as the ability to cap loan to value and loan to income levels on mortgages.

10. How will you be able to understand the UK economy coming from Canada?

Carney has a British wife and British children but has lived and worked in Canada for the last 10 years. There will be questions about how easily he can adapt to his new surroundings.

Samuel Dale is political reporter at Money Marketing


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Isn’t the Canadian economy now starting to implode just after Mark Carney leaves with a property bubble and massive debts?

    All sound Familar?

    I was suprised by the appointment of Mark Carney, as the conspiracy theorists had predicted the Goldman Sach Bankers takeover of the worlds finances and this has virtually been proved correct.

    Mark Carney an ex long standing employee of Goldman Sach makes the bankers takeover of Central Banks almost complete. Most of the central banks of the world now have ex Goldman Sachs employees in place, even Monti in Italy is an ex Goldmen Sach employee.

    Spending is what these guys want as it benefits the banks. Many people do not realise that the The Federal Reserve and the Bank of England are a private banking system, that loans money to the Goverment at interest, just like RBS or Barclays would want interest on loans made to us.

    The use of the words Federal and Bank of England have been used to make it sound like they are part of Goverment, but if you look at the Federal Reserve Fraud on Youtube, this explains how and why the Fed was set up and who is behind it.

    It even benefits the Fed if there are wars, especially if the wars are long and sustained as the Fed (Private Bank) Prints Trillions of Dollars which it loans at interests to the Goverments.

    There appears to be a huge conspiracy going on. People should go on youtube and type in The Federal Reserve Fraud (5 Videos)

    Also look at videos by Info Wars and speeches made by Ron Paul who has a large following in America.

    You can also type into Google “Goldman Sachs takes over world” and read the first 5 entries.

    It is truly amazing what appears to be happening and they are getting away with it, it is totally evil and is destroying the average persons wealth.

    You may also want to type into google the “Bilderberg Group”, which is a secretive group of bankers and the wealthiest people in the world who are trying to take over everything whilst making themselves even richer and making the average person much poorer.

    I truly do not believe that they can get away with this it is evil, people must look at these videos to find the truth and we all need to tell as many people as we can to also make themselves aware of what is going on so that people are informed and can understand why their standards of living seem to be being destroyed.

    As for the European parliament look at what Nigel Farage has to say – please spread the word for your childrens futures – these groups are manipulating even what are kids learn at school they are trying to make them into conformist who do not question authority.

    All the rules and regulations they are forcing upon us are designed so we conform and don’t question what is being done, so that we all become sheep unable to think for ourselves etc. Giving them the opportunity to carry on without anyone questioning what is happening.

    If people make themselves aware and spread the word there is still some hope for the future.

    Finally, is it any suprise that Carney says that he will start being more active and spending money – who does this benefit?

  2. @ Anonymous | 6 Feb 2013 1:15 pm

    Think you’ve been watching too many episodes of the X-Files with all your talk of conspiracy theories. You’ll be telling us next the US Government was behind 9/11.

  3. Yes it’s easy to say that but have you actually bothered to do any research, or are you one of the wealthy elite?

    There are millions of people that are waking up to what is going on just look at the numbers- lets just wait and see what happens then shall we.

    Did you bother to look at any of the videos? So the financial meltdown was fiction was it?

    No I don’t believe that the Goverment was responsible for 9/11 but I think you need to watch the fed fraud videos on Youtube as they are actually backed up by real facts.

  4. Western governments and bankers seem to be blind to anything other than the economic infrastructure that has proved so suspect and which has penalized so many innocents.
    What will the system be in 100 years time when the cashless society is a reality?
    Will we move away from taxation systems that penalize transactions to one that penalizes the holding of money – thus incentivising transactions and wealth creation?

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