Rebranding the post-crisis Bank of England: is a new Sun King replacing the old one?
The recent media reporting of the McKinsey survey of the Bank of England’s staff, which was ordered by the new BoE governor Mark Carney after he had replaced Mervin King, paints a picture of BoE under Mervin King, whom the then Labour chancellor Alistair Darling referred to as Sun King at BoE, as “hierarchical, slow-moving and beset by internal politics”.
Carney has taken charge of a new BoE that acquired more powers after the banking crisis of 2007. BoE’s new responsibilities include financial stability and bank supervision as well as the usual monetary policy role that involves setting the interest rates and keeping the inflation under control.
Such responsibilities make the Bank of England arguably the most powerful economic institution in modern British history that is run by bureaucrats. In March 2014 Carney announced the new organisational structure and the new strategy for this super-powered 320-year-old institution and published its Strategic Plan that sounded more like a radical corporate shake-up than a regular bureaucratic reorganisation. The language of the document presenting the Strategic Plan echoed the rhetoric of corporate rebranding exercises with references to “mission statement”, “core initiatives”, “transformative three-year plan”, “leadership”, “implementation”, etc. This rebranded 320-year-old institution is summed up in four simple words: “One Mission. One Bank.” Such use of management consultancy language that aims strong intention and simple message at a complex public institution with superpowers that is in the process of a big transformation was not surprising because the Strategic Plan was reportedly informed by the McKinsey consultancy work for BoE.
The newly created position of chief operating officer by Carney at the Bank of England is occupied by Charlotte Hogg who is an ex-McKinsey management consultant with experiences at the Bank of England and investment banking. In addition to Charlotte Hogg Carney brought two more new faces to senior management positions at radically reorganised and rebranded BoE. Ex-Goldman Sachs banker Ben Broadbent has become deputy governor for monetary policy and ex-IMF official Nemat Shafik has become deputy governor for markets and banking.
The McKinsey survey, which reportedly Bloomberg managed to get a redacted version of after a seven month process through the Freedom of Information Act, reveals a feudal kind of power structure under the rule of “Sun King” Mervin King at the Bank of England. However the modernisation at the rebranded “One Bank One Mission” Bank of England involves a trio of ex-McKinsey consultant, ex-Goldman Sachs banker and ex-IMF economist.
The governor Carney himself is an ex-Goldman Sachs banker. As the French philosopher and social commentator Michael Foucault has shown so effectively with his late 20th century work the power in post-feudal modern societies does not operate as crudely as exercised by sovereign kings. In our modern societies knowledge is power and replacing one Sun King of one era by another Sun King of another era does not necessarily mean progress.
At the newly branded Bank of England the thinking on economics and organisations does not seem to be reflexively refreshed and an unreformed intellectual paradigm seems to be the new Sun King. “One Mission. One Bank.” Bank of England fails to convince me.