Greg Weston: Carney a coup for U.K., loss for Canada

The announcement that Canadian economic wunderkind Mark Carney will soon be the only foreigner to become governor of the Bank of England in its more than three centuries has caused much jaw-dropping in high places and digital gasping on both sides of the ocean.
Don Drummond, former chief economist at Toronto Dominion Bank and currently a visiting scholar at Queen's University's school of policy studies in Kingston, Ont., gives his views on who should be the next Bank of Canada governor 5:06

The announcement that Canadian economic wunderkind Mark Carney will soon be the only foreigner to become governor of the Bank of England in its more than three centuries has caused much jaw-dropping in high places and digital gasping on both sides of the ocean.

"Dip me in maple syrup — what a shock!" wrote one British wag on the Guardian's website.

Financial and political analysts here and in the U.K. almost unanimously declared the appointment of the Bank of Canada governor a huge surprise, albeit equally united in their confidence Carney is a good choice for the London job.

And if his appointment is causing a stir in England, imagine the rattling of tea cups when British high society discovers that the fellow from the colonies getting close to $1 million a year to head the Bank of England actually prefers lunching at a burger joint and his favorite music is the hard rock of the '70s band AC/DC. Splendid!

Mark Carney will take over the Bank of England at a crucial time for Europe's financial system. He has denied interest in a future run at the Liberal Party leadership. (Fred Chartrand/Canadian Press)

In this country, Carney has become something of an economic superstar, widely credited with helping to steer the Canadian economy through the worst of the 2008 global financial crash and back to relative stability.

On the world stage, no other Canadian public servant comes close to Carney's international acclaim.

In 2010, Time magazine named him one of the world's 100 most influential people, while his peers chose him to head the Swiss-based Financial Stability Board charged with reforming the global banking system.

Liberals look for a saviour

At age 47, the affable economist with the giant intellect and wry smile moves from governor of the Bank of Canada to its counterpart in London as the youngest ever head of the British central bank, colloquially known as the Old Lady of Threadneedle Street.

And that has some forever hopeful Liberals in this country clinging to their dream that Carney will someday return to Canada, enter federal politics, and lead their party back from the electoral wilderness.

They excitedly point out that governors of the Bank of England are usually appointed for eight-year terms, but Carney would only agree to five, starting on Canada Day next year.

That would make him available again to return to Canada at age 53, three years after the next federal election and a year before Canadians headed to the polls again.

His cheerleaders figure that if the Liberals lose the election in 2015 and the one after that in 2019, whoever wins the leadership next April will be toast. Enter Mark Carney.

Until a month ago, a group of prominent Liberals was actively trying to recruit Carney to run for the leadership this time. And then the rumours started in public, and he finally said a firm, no, not interested.

But what has given his would-be Liberal recruiters new hope in the latest announcement of his appointment to the Bank of England is he flatly denied those rumours, too, as late as September.

On Monday, Carney confirmed he had turned down two offers from the Bank of England, but apparently got a third one he couldn't refuse in the past few weeks.

He laughed at a question about running for the Liberal leadership.

Restless for new challenges

Carney's term at the Bank of Canada isn't up until 2014, and it is highly unusual for a governor to leave early.

That has spawned speculation in political and media circles he was butting heads with the Harper government.

But we have spoken to a number of people close to Carney who say he is simply restless for new challenges — and that's certainly what he will face as head of the Bank of England, especially while the European economies are in crisis.

Those who offered Carney the job clearly recognize his talents, reputation and credentials.

In particular, he brings to the job a rare combination of experience in both the private sector and government — years at the Wall Street investment giant Goldman Sachs, followed by a stint in the top ranks of the Canadian Finance Department before joining the Bank of Canada.

He is also no stranger to the U.K., having spent more than a decade there first at Oxford, then as a senior investment banking analyst. His wife has dual British-Canadian citizenship, and Carney himself will soon have the same.

The announcement of his latest appointment was made Monday by Chancellor of the Exchequer George Osborne.

Osborne, the U.K. finance minister who personally recruited Carney, could hardly have been more direct in his praise.

He told the British Parliament that Carney is "quite simply the best, most experienced and most qualified person in the world to be the next governor of the Bank of England."

Prime Minister David Cameron was equally effusive: "His distinguished record on economic policy, the high regard of his international peers and the leadership he has shown on the global economic crisis make him the exceptional person for this job."

The BBC's business editor, Robert Peston, dismissed complaints that the new central bank chief is a foreigner.

"We live in a global village and there's every reason to opt for the best the global gene pool has to offer," Peston wrote. "Only time will tell whether Carney is the right choice, but in my book this is quite a coup."

Alas, Britain's coup is Canada's loss.