Bank of Canada’s Carney prepares for big role on international stage
OTTAWA – Canadian central banker Mark Carney was likely the ideal choice to lead the drive for global banking reform anyway, but his recent dust-up with a U.S. financial titan probably sealed the deal.
This week, leaders of the G20 group of nations are expected to privately settle on the 46-year-old Bank of Canada governor as the next head of the Swiss-based Financial Stability Board, the body helping drive international banking reform.
The announcement won’t be made until late next week at the leaders summit in Cannes,burberry outlet cheap but sources say barring an unexpected veto, Carney is about to become one of the world’s most important voices on financial reform.
Carney will remain head of Canada’s central bank as he also takes on more global responsibilities.
Leading up to the announcement, Carney will be busy in Canada with some domestic matters.
On Tuesday morning, the Bank of Canada’s governing council will announce the decision on interest rates — a no brainer which will see the central bank’s super-low one per cent rate stay unchanged.
Many analysts expect Canadian borrowing costs to remain stable well into next year and possiblly until 2013.
And on Wednesday, Carney will again be before the cameras at a news conference to explain his new outlook for the global and Canada economies, one that analysts say will see the governor stress risks to the financial system.
Carney has made no secret he seeks a big role in global policy stage.
He has taken on responsibilities chairing a Basel committee on global financial stability and has kept up a busy speaking schedule both in Canada and abroad.
In his few public remarks about the FSB rumours, he said he would serve if asked, a clear indication that he wants the appointment, which is still regarded as an add-on responsibility to his main job running Canada’s monetary policy.
The selection has in the past been made by the FSB’s plenary, but sources say the decision this time will come from the G20 leaders themselves to give the committee greater clout.
One reason Carney appears to have been chosen, according to sources, aside from having impressed his peers at international events, is that Canada was not compromised by the financial meltdown of 2008.
Unlike the U.S. and most European countries, Canada’s banks did not require a rescue and were not cited for irresponsible practices, in part because they were well regulated and monitored.
That’s why when Carney speaks in Washington, New York or Europe on the need to beef up capital requirements, reduce leverage and police financial institutions, he can do so with credibility that such an approach stood the test in Canada, says TD Bank chief economist Craig Alexander.
Ironically, geography worked against Carney earlier this year when the job of managing the International Monetary Fund was up for grabs — he was briefly considered, according to sources — but now it places him in a position of credibility and impartial arbiter of European and U.S. interests.
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