Excellent news! The Bank of England will definitely remain in very good hands. (Of course, it would have remained in very good hands in the alternative scenario in which Andrew Crockett succeeded Eddie George as well.)
Britain and the United States are both lucky in having a deep bench of first-class central bankers--a bench that seems to be absent elsewhere, at least judging by the performance of the Bank of Japan and the ECB over the past half decade or so.
Posted by DeLong at December 03, 2002 06:20 PM | TrackbackEconomist.com: ...THE biggest surprise in Gordon Brown's pre-budget statement on November 27th was not his fiscal forecasts. Rather it was that he chose this moment to announce the next governor of the Bank of England. Mervyn King, currently deputy governor, will take over from Sir Edward George next July. Mr King certainly merits the appointment. Since joining the Bank in 1991, he has been the principal architect of the successful inflation-targeting regime introduced ten years ago in the wake of Britain's ignominious exit from the European exchange-rate mechanism. Since 1997, he has been a member of the Monetary Policy Committee, the key interest-rate setting body which Mr Brown established when he made the Bank independent days after Labour took office. Despite his distinguished career, it had been rumoured that Mr King might lose the race to be governor to Andrew Crockett, who has been running the Bank for International Settlements, the central banks' bank in Switzerland. Mr Crockett was generally seen as the candidate who favoured joining the euro. By contrast, Mr King, who witnessed first hand Britain's humiliation when it was forced out of the ERM in 1992, is regarded as more of a sceptic. In evidence to Parliament in 1999, he speculated that it could take hundreds of years to establish whether Britain was genuinely convergent with the euro-area economy...
It is not just that Mervyn King's highly informed and detached take on Britain joining the Euro that is significant in the context. He was clearly an outstanding candidate in terms of professional competence for the job as well as his anti-inflation hawkishness so his rejection would have sent out a message open to damaging interpretation.
Posted by: on December 3, 2002 06:58 PM>>It is not just that Mervyn King's highly informed and detached take on Britain joining the Euro that is significant in the context.<<
No, but it does seem pretty important, after all there does sem to be a consensus that right-now inflation isn't the major problem. This together with the thinly veiled sideswipes at the very idea of the appropriateness of monetary union contained in the recent Treasury paper prepared as part of the pre-budgetary process could indicate that there is something of a sea change taking place in Euro thinking in UK policy circles right now.
Posted by: Edward Hugh on December 4, 2002 01:02 AMEdward,
>there is something of a sea change taking place in Euro thinking in UK policy circles right now.
Not quite sure Tony Blair - and Peter Mandelson - see it that way. The last I read about Tony Blair's latest take on the Euro was by Philip Stephens in the FT on Monday: "Tony Blair speaks of participation in the euro as the nation's manifest destiny." Amazing as it may seem, Stephens wasn't being ironic either as he went on to ridicule the Treasury's position set out in "Macroeconomic frameworks in the new global economy" at: http://www.hm-treasury.gov.uk/mediastore/otherfiles/admacro02-249kb.pdf
Basically, Stephen's line was that if the Treasury could get its budgetary forecasts wrong in April, it could also be wrong in being sceptical about the benefits of joining the Euro too - the FT piece is accessible to subscribers only online so I can't post the link. Between you and me, I don't think Stephens actually understands the economic issues at stake. For him, like Blair, it really is a matter of political destiny, never mind the economics.
Besides, the Britain in Europe organisation is just spending UKP 1 million on kitting up a new campaign HQ ready for a referendum next year - it's painted bright red and, by press reports, the intent is to emulate the Millbank Tower communications operation which got New Labour elected to government in 1997. I've already posted up an inquiry as to whether the plan is also to create the like of New Labour's Excalibur database for filing "dirt" on critics of the Euro - for illumination see http://news.bbc.co.uk/1/hi/uk_politics/2030737.stm and http://www.no-euro.com/factsfigures/quotes/britainineurope.asp
"Britain and the United States are both lucky in having a deep bench of first-class central bankers"
Huh? Can someone please explain how Mr. Greenspan has been able to escape being fired after having presided over one of the worst periods in American financial history (the fraud driven 90's bubble)?
Is the sole criterion for being "first-class" a strict adherence to monetarist ideology?
Posted by: on December 4, 2002 07:25 AMThis was the worst thing that could happen to the bank of england and england, as it will discourage our chances to join the single currency and grow with europe and prosper as a country. Even Ireland has joined the euro! "Its better to be inside the tent pissing out, than outside the tent pissing in"
Posted by: MR.G on December 12, 2002 03:37 AM