Let's face it, we’ve been here before. Much-loved institution, glory days behind it, shocking defending in a crisis.
Back in 2001, the cry went out for a foreign manager and up popped Sven-Goran Eriksson. You hope that, alongside all the talk of banking supervision, monetary policy and quantitative easing, someone had the sense to canvass Mark Carney’s views on Ulrika Jonsson.
Putting a Canadian in charge of the Old Lady of Threadneedle Street — the first non-British governor since the Bank of England was established in 1694 — came as a pleasant shock. And not just for the bookies who cleaned up on the hot favourite, Paul Tucker.
It’s exciting all right. But not without its risks, given that the vast scope of a revamped Bank of England will make Mr Carney, 47, a much more powerful governor than Sir Mervyn King.
And nobody quite has a handle on Mr Carney, who wrong-footed everyone by ruling himself out of the job and, like Mr Eriksson before him, has so far proved himself on a smaller field of play. He said as much himself, yesterday, remarking he was “going to where the challenges are greatest”.
Mr Carney has the credentials. He had a good financial crisis, with Canada’s banks emerging in better shape than just about anyone’s, and he already leads the G20’s Financial Stability Board. Thirteen years at Goldman Sachs (NYSE: GS - news) followed by five heading the Bank of Canada gives him both a poacher’s and gamekeeper’s perspective.
But, while Canada’s central bank already combines the same responsibilities for monetary policy and banking supervision as the freshly empowered BoE, Mr Carney’s new job is on a different scale. By assets, Canada’s top five banks are collectively only just bigger than Britain’s biggest, HSBC (LSE: HSBA.L - news) . Add Barclays (LSE: BARC.L - news) , Royal Bank of Scotland (LSE: RBS.L - news) and Lloyds and you have a domestic banking system at least three times bigger than Canada’s. And that’s before Mr Carney’s supervisory role takes in the global banks in London.
Mr Carney famously clashed with Jamie Dimon, the JP Morgan boss, over the need for tougher regulation, noting that “if some institutions feel pressure today, it is because they have done too little for too long”.
In a sense, this is his edge. Mr Carney can talk tough with authority because, unlike Mr Tucker, who found himself embroiled in the Libor scandal, there is nothing yet to taint him. The risk of appointing Mr Tucker, only to see further Libor disclosures blow up in his face, was a risk too far.
It made a foreigner, Mr Carney, a safer bet. And, besides, Harry Redknapp already had a new job.