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Global 13

Arena Insight merge, grow bigger and become more diverse – copies, essentially, of counterparts elsewhere. In August last year, Carney became the first Bank of Canada Credit: © World Economic Forum/Jolanda Flubacher Governor to speak at a major union convention – an event that brought him positive headlines and much praise from union leaders. So the financial package that is Mark Carney is as complex as it is comprehensive but the conundrum of why he played hard to get when British Chancellor of the Exchequer George Osborne so clearly wanted him, might lie in his own political ambition. It’s no secret that the federal Liberal party has courted Car- ney as a potential new leader to replace its current interim, Bob Rae. With his fluent French, easy charm and quick wit, few doubt Carney would be a formidable challenger to the dour Prime Minister Stephen Harper. But before becoming Liberal leader, Carney would have to go through the gruelling proc- Carney will spend the next five years as head of the Bank of England ess of prevailing over several other party candidates – most notably Justin Trudeau, the 41-year-old son of the late iconic  Those who have travelled in Carney’s circle as he has methodi- Canadian Prime Minister Pierre Trudeau, who entered the race cally established himself as a megastar on the world financial stage relatively late and, for many reasons, is likely unbeatable by a have observed a cross between a tough-minded banker and a natu- central banker with no prior party affiliation or formal politi- ral-born politician. cal experience. “At Davos and other global meetings, he works the room and It’s all speculation, of course, but the timing works – as does seems to know everybody,” says one former aide. “In meetings Carney’s next five years at the Bank of England – a shorter period he’ll take on all comers. It doesn’t matter who they are or what than he was offered and one that tees him up nicely for the banker’s their job is. He can be very prickly and has a huge ego which is dream job at the International Monetary Fund – or even that run at something I guess goes with the territory.” Canadian politics if Harper beats Trudeau and the Liberals need a Carney has attacked Canadian corporations for holding too much new leader. “dead money” instead of circulating it back into the economy, Carney will have none of it, and says he was finally per- and in the autumn of 2011 famously clashed at a bankers’ meet- suaded to move to London by the challenge of both the Bank of ing in Washington with Jamie Dimon, CEO of JP Morgan Chase England job and his continuing chairmanship of the Financial (net worth US$400 million; annual salary US$27 million), over Stability Board, the international financial watchdog based in Basel, Switzerland. Carney’s message is this: central banks economies, a decisive period for reform of the global financial“This is a critical time for the British, European and global are players in a cooperative financial system including its leading financial centre, the City of Lon- don; and a crucial point in the Bank of England’s history as community that includes the average it accepts vital new responsibilities,” Carney said at the news consumer and operating behind closed The tipping point, he said, came when he weighed the rela-conference announcing his departure from the Bank of Canada. doors is no longer an option tively healthy state of the Canadian financial system and the “challenges” facing the British economy. And while the job satisfaction might be high, so is the com- Carney’s insistence that the world’s larger banks should be forced pensation. The Bank of England job more than doubles Carney’s to keep a cushion of extra capital. According to those willing to CAD400,000 salary and doubtless comes with perks and prestige speak publicly after the meeting, Dimon shouted angrily at Carney, foreign to the Canadian experience (The Bank of Canada Gov- claiming that the policy was anti-American. Carney, less loud but ernor is Canada’s highest paid public servant – earning about equally passionate, stood his ground. CAD100,000 more than the prime minister). While it’s undeniable that Carney was a key figure in steering In what was likely a pre-emptive strike against criticism of him the Canadian economy through the rough financial waters of the being a foreigner, Carney said at his news conference that he would recession, it’s important to note that the ship was already in excel- take British citizenship – a path that might bring him the offer of lent condition. a knighthood – an offer he would likely reject if, indeed, he sees a “Carney was very lucky,” said the former aide who still moves in political future for himself in Canada. Canadian financial circles and asked not to be identified “He was in But between now and 2018, he has a tough, turbulent job to do the right place at the right time… Canada’s economy was in better and, in the UK a more fierce, probing press to cope with. It will be a shape than just about anywhere, and when the meltdown happened monumental achievement if today’s international financial megas- he could lecture other countries at G20 and IMF meetings and say tar is still shining as brightly in five years time. ‘don’t bail out Europe’ or whatever.” Credit for that pre-Carney stability belongs to former Liberal Chris Cobb is an author and journalist with the Ottawa Citizen in Canada Finance Minister Paul Martin, who years before Carney arrived and Vice-President of the Commonwealth Journalists Association. He on the scene had fortuitously slapped down Canadian banks that can be reached at christophericobb@hotmail.com had demanded – and lobbied fiercely for – the regulatory ability to 52 lwww.global-briefing.org first quarter 2013global


Global 13
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