Bloomberg News

King Urges Carney to ‘Be Himself’ at BOE Amid Economic Recovery

June 02, 2013

Bank of England Governor Mervyn King

Bank of England Governor Mervyn King is preparing to retire at the end of this month after a decade at the helm of the U.K. central bank. Photographer: Simon Dawson/Bloomberg

Bank of England Governor Mervyn King said an economic recovery in the U.K. appears to be under way and advised his successor, Mark Carney, to “be himself.”

“You can see signs now of a recovery,” King told BBC Radio in an interview broadcast yesterday. “The economy is growing. Not as fast as we would like it to grow, but no one can foretell the future.” Of Carney, King said “he’s an outstanding person but the important thing is that he does it in his own way.”

King, 65, made his comments on Radio 4’s “Desert Island Discs” show as he prepares to retire at the end of this month after a decade at the helm of the U.K. central bank. King chairs his final policy-setting meeting this week before Carney, head of the Bank of Canada, takes over July 1.

King, whose second term has been dominated by the fallout from what he described as “the biggest financial crisis the world has ever seen,” said people had “every right to be angry” with banks.

“In many ways, when the crisis hit in 2007-2008 I was surprised that people weren’t angry sooner,” King said. “You can see it coming through now as the impact on standards of living becomes more obvious.” He urged people not to “demonize individuals.” Instead, the authorities should keep cracking on with changing the system,’’ he said.

Dance Lessons

In a rare personal interview, King revealed that he intends to take a “gap” of six months to a year when he retires and he’s promised his wife he’ll learn to dance. “It will be a holiday,” he said.

“Desert Island Discs,” which began in 1942, asks guests to choose eight pieces of music, a book and a luxury item they would want with them if they were to be marooned alone on a desert island. The announcement that King was to be a “castaway” on the show led to light-hearted speculation on Twitter about his possible choices.

Former U.K. Monetary Policy Committee member Andrew Sentance, who argued unsuccessfully for interest-rate increases until his term ended in May 2011, suggested King might pick “Easy Money.” The benchmark rate was cut to 0.5 percent in March 2009 and remains at that level.

“Many artists have songs with this title,” Sentance, who plays in a rock band called Revelation, said in a May 29 posting. “Billy Joel, King Crimson, Rickie Lee Jones and ELO.”

Dire Straits

Save Our Savers, a campaign group, suggested any song by Dire Straits. “If QE goes wrong The Clovers’ ‘Your Cash Ain’t Nothin’ But Trash’ might soon fit the bill,” it wrote, referring to the policy of quantitative easing started by the bank under King.

Among King’s eight music choices was Mozart’s Symphony No. 40, reflecting a friendship with German Otmar Issing dating back to the early 1990s when they were the chief economists of their countries’ central banks.

“I visit him in Wurzburg and he takes me to the Mozart Festival,” King said. An avid supporter of Aston Villa Football Club, King also chose a song about the team’s 1982 European Cup final victory over Bayern Munich in Rotterdam.

King said there had been a backlash since the financial crisis that may turn out to be good for society. Young people no longer “want to earn money if it has been earned in a way that creates enormous damage to society and I think that’s a very healthy thing,” he said.

‘Complete Nonsense’

King said his training meant he knew “exactly” what to do during the financial crisis and he rejected criticism that the Bank of England should have been able to anticipate the turmoil.

“That’s complete nonsense because many things happen in the future that no one can foresee,” including what will happen to the euro area, he said. “What you pay the Bank of England for is to understand the nature of the system and to respond in the right way, and we did.”

He revealed he tries to keep his mornings at work as free as possible to “sit and read and think and reflect.” On leaving the bank, he doesn’t intend to write a book about “why I was right and everyone else was wrong,” he said.

King said he had no ill feelings toward former Labour finance minister Alistair Darling, who said in his memoirs that the governor didn’t recognize the scale of the crisis facing Britain as the credit crunch unfolded. Darling “kept very calm and he has a sense of humour,” King said. He also praised Darling’s Tory successor, George Osborne.

Private Life

“We would do better to give politicians space to let them go away in private to think some things through in depth and them come back and talk about it at length, rather than expect our politicians to have an immediate solution to every problem, every 20 minutes when a microphone is put in front of them,” he said.

King, who has a reputation for guarding his privacy, spoke openly about his private life.

He explained how he first fell for his wife, Finnish designer Barbara Melander, when they were students at Cambridge University in 1970. They were reunited three decades later after an unexpected phone call and married in 2007.

“We were both students at the time but she then went back to Finland,” he recalls of their original relationship. “About 30 years later the telephone rang and a voice says ‘it’s Barbara.’ The moral of this story is never change your telephone number.” King said he’d never married until then because “the career always came first and that was probably a mistake.”

Asked to single out a music choice, King picked “My Ship” from the 1941 musical “Lady in the Dark,” which was played at his wedding. His book choice was the complete illustrated catalogue of the National Gallery in London. His luxury would be “a good telescope so I can explore the universe and outer space,” he said.

To contact the reporter on this story: Andrew Atkinson in London at a.atkinson@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net


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