At a speech to the Bank of Canada this week, Mark Carney - the Bank of England Governor elect - suggested that central banks should abandon inflation targeting to boost flagging economies. He was talking to the CFA Society of Toronto but many have interpreted this as a smoke test of the strategy he will pursue when he takes up the BoE mantle next June.

There is no denying that Mark Carney is an exceptionally bright and talented banker, having been largely credited with protecting the Canadian economy from the ravages of the financial crisis but many in the City have decried these views as flawed (Spencer Dale, the Bank of England's chief economist for one).

The crux of his message is that for a central bank to be effective in influencing the economy, “people must generally understand what the central bank is doing.” Nobody can deny this is vital. He went on to say that in the post-financial-crisis age in which we live, inflation may  no longer be the most appropriate target for central bank policy. In order to stimulate recovery, Carney believes the central bank needs to provide assurance of longer term stability in low interest rates and that even as that recovery materialises, the policy must stand.

The Carney alternative target for monetary policy is growth - he proposes replacing it with a mandate of "nominal GDP" - and the promise that inflation would be tolerated if economic recovery drives prices up. He suggested keeping interest rates at their record low until precise, numerical targets such as employment figures, are met.

What does this mean for our banks if it materialises as Bank of England policy?  It's certainly a stake in the sand - a signal that the days of Mervyn King's dogged determination to stick to inflationary targets are long gone. And the era of fresh ideas and a new direction has arrived. With the idea of sustained low interest rates even in the face of inflationary pressure, it may offer our banks the opportunity to shrug off much of their Government debt burden and accelerate their recovery if the inflation translates through to asset value inflation, particularly in the property sector.

A big change is ahead of us all in June - and let's just hope that even if his views are controversial and his actions fly in the face of how Central Banks have traditionally operated, that Mark Carney will be right and steer the banks, the economy and all of us back on track.

Martin Dempsey