Bank of Canada Governor Mark Carney picked to lead British central bank

Carney earned respect across the world financial community during recession—but announcement still a surprise

by The Canadian Press

OTTAWA – Bank of Canada Governor Mark Carney has been chosen to run the Bank of England, beginning next summer.

Finance Minister Jim Flaherty called it a bittersweet moment Monday as he announced Carney’s departure. The two men worked closely to deal with the recent recession and turmoil in financial markets.

Carney’s handling of the recession and leadership won him respect across the world financial community.

Flaherty says it’s the first time a foreigner has been tabbed to run Britain’s venerable central bank.

Carney called it an honour.

“I am honoured to accept this important and demanding role and to succeed Sir Mervyn King with whom I have worked closely over these past five years and from whom I learned so much,” he said, in the official announcement from the Bank of Canada.

“This is a critical time for the British, European and global economies; a decisive period for reform of the global financial system including its leading financial centre, the City of London; and a crucial point in the Bank of England’s history as it accepts vital new responsibilities.”

Carney was appointed the eighth governor of the Bank of Canada in February 2008.

“I am proud of the bank’s contribution to the resilience of the Canadian economy throughout an unprecedented period of global turmoil. The bank is helping to lead the reform of the global financial system.”

He will stay on at Canada’s central bank until June 1, and move to his new job on July 1.

From the Maclean’s archives: The Canadian hired to save the world (2011), a profile of Mark Carney by John Geddes.

“And Carney is highly marketable. At just 46, he’s unusually young for a central banker, and cuts an athletic figure. (He ran the Ottawa marathon in three hours and 48 minutes last spring.) His bio comes complete with a Canadiana prologue any political mythmaker might envy. Born in the Northwest Territories, where his father was school principal in remote Fort Smith, he’s said one of his earliest childhood memories is the smell of the furs his mother bought for making parkas.”

“But through the 2008 financial market crisis and the recession that followed, Carney became a source of noteworthy commentary. On the bankers whose reckless loans got the world into its mess, he suggested they were too distracted by “opera or the ski slopes of Davos.” Accused of being overly optimistic in a forecast, he rebutted, “We don’t do optimism, we don’t do pessimism, we do realism at the Bank of Canada.” More recently, asked by CBC’s Peter Mansbridge about the so-called Occupy movement, Carney praised the tent-city demonstrations as “entirely constructive.” “I understand the frustration of many people, particularly in the United States,” he said. “You’ve had a big increase in the ratio of CEO earnings to workers on the shop floor.”




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Bank of Canada Governor Mark Carney picked to lead British central bank

  1. cr** why do we lose our “best & brightest” to a former “Colonial” and Imperial power? Or is it that he must save the world. Very upset.

  2. Good for him, it is quite a feather in his cap and he has done a good job for us. Truth be told, the Brits need him more than we do.

    But Mark Carney didn’t balance the budget in the 90′s. He didn’t create conservative tradition in Canada’s banking sector. He didn’t create the oilsands. Those are the reasons Canada survived the last recession relatively unscathed, not Mark Carney.

    • There was no conservative tradition in Canada’s banking sector. The banks lobbied for deregulation (as did Harper while in opposition.) The Liberals said ‘no’ and prevented a financial collapse.

      The oil sands are not doing the country any favors. The recovery from the 2009 recession has been one of the weakest recoveries since the Great Depression. The overvalued bitumen dollar has also killed 500,000 export-related jobs, turned $20B trade surpluses (current account) into $50B trade deficits and caused productivity growth to plummet.

      Even Alberta is not benefiting from the oil sands. The price of oil slumped this year and the deficit tripled (if AB had the population of ON it would be $10B.) If the price of oil drops below $80/barrel, most production will be unprofitable.

  3. “Carney’s handling of the recession and leadership won him respect across the world financial community.”

    I always thought Carney was given too much credit. The reality is the previous Liberal government prevented a financial market meltdown in Canada by resisting American banking deregulation that wreaked havoc in a number of other countries.

    Carney was also too hawkish on inflation, having an itchy trigger finger on raising interest rates. That sends the wrong signal to investors who are hoarding money. In order to get interest rates back up to normal levels we need to produce a strong recovery, which requires a looser inflation target. Japan also took a hawkish position which smothered its recovery and has been stuck with interest rates at 1% or lower for 17 years.

    “Much of the country’s resilience stems from policies—such as bank regulation and sound public finances—which predate Mr Harper.” (The Economist)

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