28
Nov
12

Is Mark Carney Bad for Bank of England?

For the first time in the Bank of England’s history it has chosen a non Britisher to govern the most historical of global Central Banks. By selecting Mark Carney, the chief of the Bank of Canada, England has made a bold statement in trying to mimic Canada’s success in recent years. But should they really try to? Looking at Canada, it has weathered the storm from the 2008 economic crisis but one comes to ask how? With the Canadian central bank chief Mark Carney following the rest of the global central bank leaders in opening up the flood gates to monetary policy a massive housing and real estate bubble was created to replace the lack of growth from the previous crisis. Canadian Consumers, levels of government as well as businesses are in debt at historical levels. Canadian Banks grew by mammoth proportions as the industry took advantage of the looser regulations employed by the Central Bank. Global commodities prices ballooned as a result of the loose monetary policy also helping the Canadian economy (especially being a primarily resource driven one). With the end consequence inevitable, the Canadian Banks now have more riskier assets than ever under their helm. With lowered interest rates it becomes harder for insurance companies to pay out annuities without taking a loss as well as fixed income investors (especially retirees) to generate income without any level of risk in Canada. The Canadian economy is on dangerous ground as an emminent housing correction as well as global slowdown (resulting in less demand for commodities) will crush it. Is Mark Carney leaving the Bank of Canada before the ship sinks? With England’s finances fairly instable right now as the EU is on the brink of a recession, how can Carney’s track record of excessive monetary policy benefit them? Having said this, whas it a good choice for the Bank of England to employ Mark Carney as it’s Governor?

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1 Response to “Is Mark Carney Bad for Bank of England?”


  1. December 7, 2012 at 4:55 pm

    great publish, very informative. I’m wondering why the other specialists of this sector do not understand this. You must continue your writing. I am confident, you’ve a huge readers’ base already!


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