So during the first of the two short slots I did last night on Bloomberg with Joe Weisenthal, it was put to me, via an audio of Paul Donovan at UBS, that Mark Carney was adopting too dictatorial a style.
The way Paul put it was that Carney was treating the BoE like it was the Bank of Canada, when that wasn’t how things were done at the BoE.
I haven’t dealt personally with Mark, but I have heard a lot about him from others, and I did not form the same takeaways as Paul.
My impression from those conversations is that he’s energetic and very forceful. But how many leaders of large organisations, that have important policy levers, where making a mistake is costly, do not have these characteristics?
I also don’t see any evidence that he has overstepped the mark regarding his roles on the policy or oversight committees of the Bank, where his powers are clearly proscribed (eg by voting).
It’s also worth pointing out that in his role as manager, he’s entitled to manage as he sees fit. Clearly, he has to give due regard to maximising the chance of taking others with him in changing up the Bank. But that would not necessarily mean letting those underneath him decide. And one would anticipate conflict, with those who have thrived under and are more comfortable with the old way of doing things.
That is not to say I am a particular fan of what he has done at the Bank.
I doubt that the new matrix management model, which tilts towards all directorates serving all functions of the Bank, would have made any difference in the last crisis, or have any impact on the next one. And the confusion and blurring of accountability that such systems can cause may generate as many costs as benefits. The best that can be said about these changes are that they are changes, without which institutions like the Bank can take on lives and objectives of their own.
And I think forward guidance was a mess. Confused over whether it was intended to impart stimulus or not. Appropriating the language of a tool that should have been saved for when it was really needed [ie when they really needed to stimulate].
As I’ve blogged ad nauseam, I also think Carney has made a habit of speaking off topic, which is not advisable for the head of a public body which already has a broad remit.
However, I don’t see any justification for the that Carney is a dictator, clumsily infringing on BoE cultural norms. I don’t recall his predecessors adhering to this stereotype of softly, softly Britishness.