Ex-Goldman Sachs banker appointed as new governor at Bank of England

Osborne’s choice for governor of the Bank of England will do nothing to prevent the next collapse of the financial system.

Mark Carney Bank of England governor Goldman Sachs banker

Today the chancellor confirmed that there will be no real change at the Bank of England. There will be no change to the Treasury and Bank of England’s obsession with inflation targeting and “price stability”. Above all, he confirmed that there will be no reining-in of the banks; that banks will not be re-structured – to separate the retail and investment arms, and ensure that banks are no longer too big to fail.

He confirmed this by appointing an ex-Goldman Sachs banker, Mark Carney, as governor of the Bank of England.

The FT was right when in January this year it described Carney as [FT paywall] “the leading example of a new breed of ambitious, internationally focused central bankers who view regulatory and monetary policy issues through a more market-based lens”. He favours an “open and resilient financial system” – code for giving the banks free rein in global capital markets. And like many of his peers he believes that the key to recovery lies in all western economies “capitalising on the immense opportunity that emerging markets in general and China in particular represent”. Like others, he prefers exports over the expansion and strengthening of domestic markets.

So be very afraid. Business-as-usual will prevail. And nothing will be done to constrain the City, and therefore to prevent the next collapse of the financial system.

Carney is a central banker steeped in the culture and practices of Goldman Sachs’s investment banking arm. Before becoming Canada’s central bank governor, he spent 13 years with Goldman Sachs in its London, Tokyo, New York and Toronto offices. He held a range of senior positions. The most significant was as managing director of investment banking.

In a speech made recently Carney made the right noises. He complained of “a system that privatises gains and socialises losses” and endorsed the approach that sets capital and leverage ratios for banks. He’s even commended the Occupy movement for being “constructive”.

But there is nothing in his speeches that indicates that he will help give Britain’s real economy the protection it needs from its over-mighty – and still very dangerous – banking sector. Nothing, in other words, that indicates the real economy – the productive sector – will be given priority over the City’s preference for reckless global speculation.

Instead like many others who adopt a “market-based” approach to regulation, Carney prefers to tinker – retrospectively – with the capital ratios of banks. This is because he and many others in central bank circles know that most of the Britain’s banks are very highly leveraged. That without the support of the Bank of England’s quantitative easing programme, and its very low lending rates – all effectively backed by British taxpayers – Britain’s banks would effectively be insolvent.

And so Carney will continue with quantitative easing – which has provided British banks with the liquidity needed to indulge in speculative activity both at home and abroad, speculative activity that bears a scary resemblance to that undertaken before the crisis.

He is unlikely to pressure his friends in the City’s commercial banks to lend at low sustainable rates to Britain’s productive sector. He is therefore most unlikely to reverse the most bizarre and historically unprecedented aspect of today’s British banking system: the fact that those of us in the real economy are lending to banks. Their original mission – of lending into the real economy – has been turned on its head. Today Britain’s banks are recipients of loans (deposits) from those active in the real economy – and subsidies from taxpayers.

None of this is likely to change.

Mark Carney governor Bank of England

Source: http://www.guardian.co.uk/commentisfree/2012/nov/26/mark-carney-appointment-bank-england

4 comments

  1. UK is Greece but 100 times worse ! Goldman Sachs is a criminal cartel. UK deserves to get crushed and ruined. Cant wait !

  2. “I have two great enemies, the southern army in front of me and the financial institutions in the rear. Of the two, the one in the rear is the greatest enemy. The money power preys upon the nation in times of peace, and conspires against it in times of adversity. It is more despotic than monarchy, more insolent than autocracy, more selfish than bureaucracy. It denounces, as public enemies, all who question its methods or throw light upon its crimes. I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. Corporations have been enthroned, an era of corruption in high places will follow, and the money power of the country will endeavour to prolong its reign by working upon the prejudices of the people until the wealth is aggregated in the hands of a few, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of the war.” – Abraham Lincoln

    “The death of Lincoln was a disaster for Christendom. There was no man in the United States great enough to wear his boots and the bankers went anew to grab the riches. I fear that foreign bankers with their craftiness and tortuous tricks will entirely control the exuberant riches of America and use it to systematically corrupt modern civilization.” – Otto von Bismarck, Chancellor of Germany, after Lincoln’s assassination

  3. watch out” britain, Another Disater waiting to Happen” your Banks Will be Robbed of billions in Sterling by the time this Puppet master ” Mark Carney from Canada will clean ye out from all british Banks” Cameroon has selected you best Man to Clean ye out” Like Diamond done” dont say you have not been warned” read Freedom of information and Check Mark Carney Out” i know who the Bugger is” do You” con Master who toxic USA with Drugs and War money” dangerous person, he fecked up in USA ” now he will do the same to Britain” beware you have been informed now by me!
    David Cameroon’s plan B and other Corrupt British Government will clean british Banks out.

  4. can we stop putting godman sachs crooks in the government. they only care about themselves and making their buddies rich. they could care less about the citizens and we are just a bottom line to these amoral crooks.

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