Sir Mervyn King held an emotional farewell with the Treasury Select Committee this morning ahead of his move from the Bank of England to the House of Lords. Committee chair Andrew Tyrie was as keen to recruit him as a supporter of banking reforms going through Parliament in the future as he was to grill the outgoing Governor: in fact, all the of the MPs on this often incisive committee were reasonably gentle with the man known as Merv the Swerv. As part of his farewell, he gave some advice to his successor which sounded a little bit like a L’Oréal advert:
‘Well, I have no intention of giving public advice, but if you really insist, really insist… it’s very simple: he should be himself. Governors change, it’s very important that each governor is true to themselves and that means acting and behaving in a different way than their predecessors. Everyone is different, and trying to fit into a mould doesn’t work. He must and I’m sure he will be be himself.’
But like all good L’Oréal adverts, the Governor couldn’t resist suggesting that his successor could carry on indulging in a few cheeky treats, like Quantitative Easing. He said:
‘The scale of asset purchases will have to be unwound and we have to return to normal conditions at some point. When that point is, I don’t know.’
He told David Ruffley that the recovery was ‘not sufficiently rapid to reduce my concern that we need more stimulus’.
He was even less cheery when talking about the power that the governor holds, saying that ‘even’ Mark Carney wouldn’t hold that much sway given he only has one vote. ‘I don’t believe that the governor as an individual is too powerful,’ he said:
‘I don’t think powers are vested in an individual. The idea that I can determine monetary policy myself is false. Even Carney will only be one individual. Members of these committees take their responsibilities very seriously.’
Does that mean that Mark Carney isn’t worth all the hype about the revolution in monetary policy, instant recovery and constant sunshine for the next five year that he’s been billed as bringing to the Bank? It will be difficult for the new Governor to live up to the expectations placed on him ahead of him starting his new job on Monday. But Tyrie finished the session by telling King that he left the Bank ‘a much stronger institution than you found it’. To the MPs today, at least, Merv really was worth it.
More Spectator for less. Stay informed leading up to the EU referendum and in the aftermath. Subscribe and receive 6 issues delivered for just £6, with full web and app access. Join us.