Don Murray: It's all 'Hello Guv' as Mark Carney takes London stage

There was some churlishness, yes, and some stiletto remarks about his huge new salary in a time of restraint. But as Don Murray reports, British MPs and commentators generally treated Mark Carney yesterday as the George Clooney of central bankers.
Well, it could be like this, Bank of Canada Governor Mark Carney tells British MPs at a committee hearing in London on Thursday. (Reuters)

Come with us now to the mythical Forest of Arden, home of sweet-smelling adjectives, and intoxicating comparisons with movie stars and their ilk — all fabulously handsome, fabulously rich, fabulously successful.

In these Shakespearean glades a man lays his head on the luxuriant turf and hears the siren words.

The man is a banker — a Canadian banker, no less. Mark Carney, or as one British hack has dubbed him, "the most famous Canadian Britain has ever heard of."

Other British hacks have compared him to George Clooney, Keith Richards, Don Draper, José Mourinho (he's the soccer manager of Spanish champions Real Madrid) and a host of lesser heroes.

All this after Carney was drafted from his position as governor of the Bank of Canada to become the next governor of the Bank of England.

Thursday, Carney was supposed to leave the forest and meet reality, in the form of the treasury select committee of the British House of Commons.

British MPs were going to grill him over his views on inflation, over his approach to something called "escape velocity," over his pay package.

Ah yes, his pay package. It's big, very big. The deal he negotiated will pay him over £874,000 a year — that's almost $1.4 million.  And that includes £5,000 a week — $8,000 — in housing allowance. 

Did he not think, a British MP asked in a detached tone that hid a stiletto in the words, that British civil servants, whose pay has been frozen for two years, might resent that?

Another inquired with lethal politeness, was the £250,000 yearly housing allowance in recognition of the fact that mortgages in London were expensive?

Carney skated. He accepted what he was offered; he wasn't aware of "resentment" over his pay. His package was in line with that of another senior British figure who regulated the banking sector; and because he had a five-year contract and wasn't eligible for a pension, part of the package was to compensate for that.

Then he invoked his humble Canadian roots: "I’m moving from one of the least expensive capital cities in the world — Ottawa — to one of the most expensive."

Escape velocity

Amazingly, this seemed to work. Without another word the MPs moved on to other, more arcane topics, such as flexible inflation targets and escape velocity.

And what is escape velocity, you ask? It all to do with finding a way to relaunch the moribund British economy, now shrinking and heading toward what economists call a "triple-dip," a possible third recession in three years.

For these challenges, Carney offered smooth words and a 45-page outline of the problems faced by the British central bank and possible approaches to deal with them when he finally moves into his office on historic Threadneedle St. in July. 

It was so smooth that MPs appeared entranced. Several surrounded him like groupies at the end of the four-hour session.

For their part, the press commentators were no different.  They talked of his "worldly-wise confidence," his "'dab hand," his  "sassy and relaxed style."

The prize for metaphorical musical overkill went to the financial commentator who wrote, "instead of Keith Richards trashing hotel rooms the committee was treated to gentle Canadian crooning by Michael Bublé."

Alas, some churl

But as Shakespeare pointed out, the Forest of Arden isn't all honeysuckle and honeyed words. There is also the "icy fang/And the churlish chiding of the winter wind."

In this case, the chief churl in the icy chorus has been none other than the present governor of the Bank of England, Sir Mervyn King.

He took public exception to some unguarded words of Carney a couple of weeks ago when the soon-to-be-governor suggested that the fight to stimulate the British economy might mean loosening the annualized inflation target of two per cent, which the British central bank is supposed to aim for.

King said this: "Wishful thinking can be indulged if the costs fall on the dreamers; when the costs fall on others, it is unacceptable. So a long-run target of two per cent inflation should be an essential part of our macroeconomic framework."

Wishful thinking? Dreamers? In bankers' language that's the equivalent of pistols at dawn. 

Carney, being a careful (Michael Bublé-like?) banker, retooled his language for the MPs. 

He talked of the challenge of delivering price stability while promoting a timely, sustained recovery and the highest sustainable level of employment in the U.K. economy. And pie and ice cream if they wanted that, too. 

Above all, nothing to upset the grumpy old man still in his chair on Threadneedle St..

But the carping could be heard from other quarters as well.

While one MP dismissed Carney's salary as almost a pittance compared to some European soccer managers, a commentator turned that analogy on its head and not to Carney's advantage.

"Fleet Street’s business editors seemed almost united in thinking that Mark Carney’s appointment was a good thing," wrote Ross Clark in the magazine The Spectator. "But I suspect the public will be inclined to view it as more akin to what the Football Association does before every soccer World Cup: appoint a manager on a record salary — several times higher than any other country pays — in the wide-eyed belief that ‘you get what you pay for’. And then we get knocked out in the quarter finals again."

Not even a semi-finalist. And from London's banking district a financier whispered, "It must be time to sell Carneys, I’ve never seen a stock so over-hyped." 

But the banker himself was imperturbable. And to him, the last word, to the MPs. "I would like to achieve an exit in 2018 that is less newsworthy than my entrance." Harder, in London, to do than to say.