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Mark Carney report card: Successful first week at BoE?

Mark Carney report card: Successful first week at BoE?

In the days and weeks leading up to Mark Carney's new job at the Bank of England, there was debate about whether the new governor would lay low in his debut. Carney, who took over on July 1, set the tone swiftly with a bang.

Or rather, a roar, if you agree with one characterization of Carney as published in a BBC profile that quoted a former government colleague as saying, "He's going to tear through London like a lion."

To recap his first days, not only was he dubbed a George Clooney lookalike -- which added a juicy dimension to his celebrity status -- he apparently also made headlines -- and fans -- for riding the Tube on his first day of work. "It is nice to see someone being suitably parsimonious," Justin Urquhart Stewart, managing director of Seven Investment Management who spotted Carney on the train, told the Guardian newspaper.

Craig Wright, chief economist at Royal Bank of Canada, said the splashy start is characteristic of Carney. "I think anybody who knows governor Carney knows that it's not in his character to lay low," said Wright. "He's not passive by any nature and he's not a personality that would lay low in the face of a challenge."

Now that the first-week glow has dimmed a tad, questions remain over whether Carney can help revive an economy that has been ravaged by crisis.

Carney rattled markets by signaling that interest rates would be stagnant for a while, which led many to believe the new governor plans to employ "forward guidance" in his work with the elite team at the Old Lady of Threadneedle Street.

Some economists had expected such a signal, but it surprised others. "Carney was imported to deliver, in the [Chancellor of the Exchequer's] words, ‘monetary activism' and he has not been slow to act,” Brian Hilliard, chief U.K. economist at Société Générale told the Globe and Mail newspaper.

His to-do list is long including, but not limited to, digging the U.K. out of recession, dealing with how to wean the economy off of quantitative easing, keeping inflation and the currency in check, reforming the banking sector and dealing with the BoE's new responsibilities as a super-regulator over the banking industry.

Unlike Canada, which escaped the Great Recession largely unscathed compared to other economies, Europe is in deeper trouble. What's more, Carney must jolt the economy and financial system as uncertainty reigns.

"He faces three key challenges. The first is to get the UK economy moving again. The flexible second is to oversee the next phase of reform of the outsized banking sector. And the third is to steer the BoE through its own process of evolution as the Bank takes on greater powers to help prevent future crises," says the Economist Intelligence Unit.

Despite his "very successful week" across the pond, the biggest hurdle Carney faces going forward is his ability to meet high -- maybe too high -- expectations. "Governor Carney has been linked to curing all ills of the British economy. Hopes have ridden high on his start," says RBC's Wright.

Carney was known for championing a "flexible" inflation target, "forward guidance" and for being a savvy communicator. Notwithstanding all the buzz, how these trend-setting, marquee qualities play out and impact the work of the BoE has yet to be revealed.