I should preface this piece by warning you that if you’re after a considered analysis of the pros and cons of the Bank of England’s new core strategic goals, you are probably in the wrong place. Consider this more of an aesthetic gut reaction.
After all, it’s difficult, upon first glance, to find much to object to in Mark Carney’s overhaul of the Bank of England. The institution is in the midst of its biggest transition since 1997, as it takes back responsibility for regulating the financial system, as well as the broader economy. Even if that weren’t the case it was already long overdue a management shake up.
The new Governor has shuffled many of the existing jobs, cleared up the power structure so individual directors have more clearly-defined roles. This is all good news. He has brought in fresh talent (including new Deputy Governor Nemat Shafik) and will doubtless bring in more. He will ensure the Bank has a single research agenda and international policy (both roles were a little muddy in the past).
The big reshuffle underway at the moment can hardly do much harm. Ben Broadbent will be an excellent deputy governor for monetary policy (he’s replacing Charlie Bean), Andy Haldane ditto as chief economist, Spencer Dale will be a great financial stability director. It’s perfectly nice that there will be a new signature on banknotes, as Victoria Cleland replaces Chris Salmon as chief cashier (he’s off to replace Paul Fisher, who in turn is becoming deputy head of the PRA).
Much of this makes plenty of sense – and I shall leave the full analysis to those with a better understanding of corporate restructurings. My concerns are less about the actual restructuring, and more about the rather sterile, charmless way it has been conveyed – and the picture that leaves with us of today’s Bank of England.
Last autumn Mr Carney brought in management consultants McKinsey to mastermind the overhaul. And he got what he paid for – a high-grade Harvard business school analysis of how the Bank should be run. His Mais lecture in the City tonight was smeared with consultant-speak. The new buzz-phrase, repeated numerous times in both the speech and the associated documents is “One Bank”: “One Mission, One Bank”, “One Bank, your reward”, “One Bank research agenda”, “One Bank data architecture”, and it goes on.
His speech contained a fifteen point plan (count ‘em) but surprisingly few verbs. Consider this passage: “A Bank with many and varied responsibilities, but a single timeless mission; An institution that works as One Bank to exploit the synergies and complementarities across our policy functions; A Bank that draws on its long history of intellectual leadership and international engagement to shape an open, resilient global system”.
You get the idea. It’s all important stuff. And I suppose it does represent the 320-year old institution being dragged into 21st century corporate culture. And it’s churlish of me to pick on the style rather than the substance – after all, I’m sure the Bank has always had its share of dreadful corporate culture (though it’s been mainly kept behind-the-scenes up until now).
But for some reason it also saddens me. It all sounds rather soulless – a rupture with a particularly rich history.
Threadneedle Street, Pink-coated top-hatted doormen; the Governor’s eyebrows. They may not be particularly modern symbols in the world of central banking, but they are part of what makes the Bank of England great. I hope that in this new “One Bank” such anachronisms are not completely suppressed.