Carney says Bank of England should not rely on single individual

Wed Jan 23, 2013 2:14pm EST
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Carney reacts to criticism BoE governor has too much power

* Says will aim for clear and transparent accountability

OTTAWA Jan 23 (Reuters) - Canada's Mark Carney, the next Bank of England governor, pledged on Wednesday to ensure that policy decisions at the central bank do not rely too much on any one individual and said he would aim for clear and transparent accountability.

Former senior BoE policymaker Adam Posen told British legislators on Tuesday that the current Bank of England governor, Mervyn King, is too powerful. He said the situation will worsen when Carney, who is now governor of the Bank of Canada, takes over in July because he will have additional powers of financial regulation.

"I would make the distinction between the responsibilities of the institution, and the power of any individual within that institution," Carney said in a news conference, when asked about the criticism, although he said he had not seen Posen's testimony.

"Part of my responsibility when I am there is that as the Bank of England gets additional responsibilities ... is to ensure that the committee structure, the new governance structure, the other aspects, work to their full effect," he said. "To ensure that the institution is discharging its responsibilities in the right way, it's not relying on a single individual - it won't be - and that accountability is clear and transparent."

Posen's comments were the strongest criticism so far from a recent member of the Bank of England's Monetary Policy Committee alleging King's lack of accountability. He said the governor rejected alternative views on how to boost the economy and excluded external members of the committee, who are appointed by the finance minister, from key discussions.

Other critics have derided King as an authoritarian "Sun King", although, in fact, the BoE's structure allows for more open debate than at the European Central Bank or Bank of Canada.

Carney, who is also chairman of the Group of 20's Financial Stability Board, spoke to reporters after the Canadian central bank announced it was holding interest rates steady and that the need to increase rates was "less imminent".   Continued...