MONTREAL (Reuters) - The next head of the Bank of England, Mark Carney, agreed on Tuesday with current Governor Mervyn King that the Bank could not be run as a one-man show.
King made his remarks in a television show broadcast on Sunday, during which he also urged Carney not to bring to Britain the policy he had launched at the helm of the Bank of Canada of spelling out how long interest rates would remain low.
King said Carney would work with the rest of the BoE’s Monetary Policy Committee: “It’s not a one-man show.”
“He’s absolutely right, Mervyn, as he is in all things - Mervyn is absolutely right,” Carney told a news conference in Montreal, his last as Bank of Canada governor.
The Bank has tremendous responsibilities, in monetary policy, in supervising banks and insurance companies, and macro-prudential policy, he said. “But each of those responsibilities are discharged by committees of which the governor of the Bank is only one member.”
Carney will be the first foreigner to run the Bank, and the British press have alluded to him as a sort of rock star. He is also head of the Group of 20 leading economies’ Financial Stability Board, a task force on financial regulation.
Asked if there was a limit to what monetary policy could do for the global recovery, he said there was a role for monetary policy, fiscal policy and structural policy.
“It depends on the circumstances. There are tools available if necessary but they have to be appropriate to the objectives of the central bank and the realities of the forces on output and inflation in the various economies,” he said.
The global financial system is better insulated to withstand shock than it was before the crisis began several years ago, he said, but much work remained.
“There’s as much to do ahead on financial reform as has been done, which is one ... of the reasons why the challenge of the Bank, the City of London, in conjunction with the FSB work, is, I think, of intense interest and importance,” Carney said.
Additional reporting by Solarina Ho in Toronto and Louise Egan in Ottawa; Writing by Randall Palmer in Ottawa; Editing by James Dalgleish