Bank of England: the Old Lady has new faces

The Bank of England has embarked on its biggest shake-up since being granted independence in 1997. Governor Mark Carney appointed two new deputy governors: Nemat Shafik, poached from the International Monetary Fund, will take charge of the markets and banking portfolio. She will deal with the aftermath of the forex and Libor (interest-rate-fixing) scandals and unwind the Bank’s quantitative-easing programme.

Ben Broadbent, who has been on the interest-rate-setting committee since 2011, will oversee monetary policy. Two other deputies will manage prudential regulation of
the banks and financial stability. The reshuffle is to help ensure that Britain can avoid another financial crisis.

What the commentators said

The Bank Carney inherited “was regarded as a ramshackle institution”, with “poorly integrated teams and reporting lines” yet with “heavily expanded regulatory responsibilities”, said Sam Fleming in the FT. But can Carney’s changes prevent another crisis?

“Vital” as revamping the organisation’s corporate governance is, don’t count on it, said Allister Heath in City AM. Carney himself has warned that our historically low interest rates risk creating another bubble, but he remains “too complacent about housing and too dovish about the rate at which interest rates are likely to have to rise”.

Throw in the “insouciance of the commercial banks when it comes to curbing past excesses”, agreed Philip Stephens in the Financial Times, and it is hard to “predict a quiet ride for the governor”.

Merryn

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