Earlier this week, the outgoing governor of the Bank of England Mervyn King convened a panel of his high-profile friends to discuss the lessons that economists should learn from the global financial crisis. Admittedly it was not a new topic for this popular event, co-organised by the UK central bank and the London School of Economics, but neither was it rigidly adhered to by the high profile panellists – including Ben Bernanke, King's counterpart at the US Federal Reserve.
First up to speak, Bernanke reminisced about the adjoining offices he and King occupied when both were academics at MIT back in the 1970s. Later on, Larry Summers informed the audience of his own decades-long association with the UK governor. The affable former US treasury secretary and Harvard academic complimented King for being the smartest guy he knew, as well as having the smartest-sounding accent.
After Olivier Blanchard of the IMF made a valid attempt to address the official topic of discussion, Axel Weber closed the evening with memories of his time as the governor of the German central bank. As a new boy to central banking, Weber said he often relied on King's wise advice and counsel, particularly when one of the early nationalisations of the financial crisis in 2008 was one of Germany's own banks, Hypo Real Estate and its Irish subsidiary Depfa Bank – something that is easy to forget among the European banking chaos that followed.
Now that Weber is in the private sector, as chairman of UBS, he professes to enjoy the freedom to speak his mind. This raises the interesting prospect of King being able to do the same, come June. A deal for King to write the definitive UK book on the crisis is surely soon to be inked. Even more fascinating, perhaps, is speculating what FTSE 100 company King will walk into – simply swapping the 'governor' plaque on this desk for one saying 'chairman of the board'.
If any board directors or recruiters had managed to get a ticket for the event, among the rows of professors, students and press packing out the lecture theatre, there can be no better set of job references to draw upon than Messrs Bernanke, Summers, Blanchard and Weber (not that King would need to rely on such glowing referees, nor for that matter submit a CV).
What all this meant exactly to Mark Carney, the incoming governor of the Bank of England sitting quietly in the third row, is unclear: no references to him were made during the evening, nor was any effort made to acknowledge his presence – this was Mervyn's big night after all. Rather, the Canadian made a commendable job of smiling and appearing to be interested in the central bankers' love-in happening on stage.
Carney finally takes up office this summer; only then will he find out the full extent of his bequest from the departing King. Some obvious clues should be in the news and in most UK town and cities outside of London, but at least he has a head-start on one front: building up a network of high-profile friends. Living up to his compatriots' reputation for being super-friendly, Carney was in deep discussion before the panel session began with an older, distinguished looking gentleman sitting next to him, who just happened to look a lot like Jean-Claude Trichet, the ex-head of the ECB.
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