Super-banker Mark Carney negotiated a whopping 30% increase in remuneration, in the form of a pension contributions, providing him with a total of £624,000 per annum for the Bank of England job. This was not agreed by the remuneration committee but was negotiated by the Treasury (George Osborne) and agreed by the bank’s non-executive directors.
If I had a time machine, I’d go back to 1938 in Cleveland, Ohio, and be in the room when Joe Shuster created comic book hero Superman. I don’t have a time machine, but I was in London in November 2012 when super-banker Mark Carney was invented.
So since we’re all having to put our hands in our pockets and pay this man his fabulous wealth, maybe we should dispel a few myths before going any further. Gushing George Osborne describes him as an “outstanding candidate” in the press release. H eloves Carney for “avoiding big bail outs and securing growth.” So is that what super-banker really did?
Canada has always had a conservative banking industry and the banks in Canada were not over-exposed on entering the credit crunch. Canada avoid the crisis in every way except for being the neighbour of the USA which did cause a short term shock.
Carney arrived at the Bank of Canada in February 2008, when the world crisis was already in full swing. It would be impossible for Carney to have implemented policy that retrospectively saved Canada from turmoil. He was simply there when nothing happened and is happy for people to believe he is a genius as a result.
As for Osborne’s comment on “securing growth”? The fact is that countries like Canada and Australia are rich in resources at a time when the expansion of China has created massive demand for them. Carney didn’t arrange for the rise of China, although if someone had attributed it to him, you can bet he’d allow the myth to perpetuate if it meant an extra £144,000 annually.
For Canada, the last five years have been so benign that this bloke could have turned up to work and played ping pong all day. Yet, here we are, pouring praise on him. We know how Alastair Darling and Gordon Brown would respond to a major financial crisis, because they were there, for good or bad. We don’t know how this guy would be in a crisis, because he’s never been in one. Yet he’s the genius according to George Osborne.
Osborne has returned regulation to the Bank of England, in the bizarre belief that they can regulate better. This obviously ignores BCCI and Barings. Carney is supposedly qualified as a regulator as he has private banking experience at Goldman Sachs. However, it seems that he advised Russian on their 1998 financial crisis while Goldman was simultaneously betting against the country’s ability to repay its debt. This bloke doesn’t know what’s happening right under his own nose, yet he’s in charge of London?
America has much more experience of capitalism than us, and they always, rightly, have a lawyer in charge of regulation. In a recent TV interview Adair Turner, another economist, didn’t know whether Libor cheating would constitute fraud. He was in charge of City regulation at the time. You couldn’t make it up. Yet here we have another economist being put in charge of regulation, when the job should go to a lawyer. Incompetent Osborne.
For a central banker he does at least have a very smart suit. Maybe that’s why we’re paying him an extra £144,000 of our money each year. Let’s look on the bright side, George Clooney would have wanted even more.