Sunday, November 23, 2014

Carney to head Bank of England

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 today as he announced Carney’s departure.

He said he’s pleased to see Carney take on new responsibilities, but the governor will be missed at home.
The two men worked closely to deal with the recent recession and turmoil in financial markets.
“I am proud of the bank’s contribution to the resilience of the Canadian economy throughout an unprecedented period of global turmoil,” Flaherty noted.
“The bank is helping to lead the reform of the global financial system.”
Carney’s handling of the recession and leadership won him respect across the world financial community.
Flaherty said it’s the first time a foreigner has been tabbed to run Britain’s venerable central bank, which dates to 1694.
CIBC chief economist Avery Shenfeld called the appointment a rare move.
“For Canada, it’s a nice recognition that we’ve handled our monetary and regulatory affairs well enough to be recognized abroad, but it leaves a gap at the top of the monetary policy house here,” he warned.
“Governor Carney has been somewhat hawkish in words, but dovish in action, in the past couple of years,” Shenfeld added.
“But the absence of rate hikes since 2010 largely lines up with the absence of inflation pressures and the generally mediocre growth picture.”
Carney said it’s an honour to take over in London.
“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 remarked.
“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 conceded he has a tough job ahead.
“The five-year term is the opportunity to see through the path of that reform, to see through the transition and the rebalancing of the U.K. economy, and also to relaunch the Bank of England with its much expanded and vital responsibilities,” he said.
Carney was appointed the eighth governor of the Bank of Canada in February, 2008. He will stay on at Canada’s central bank until June 1 and move to his new job on July 1.
The Bank of England, one of the oldest banks in the world, sometimes is referred to as “The Old Lady of Threadneedle Street,” in reference to the London thoroughfare where it has been based since 1734.
King, the bank’s departing governor, was appointed June 30, 2003.
The Bank of Canada will set up a search committee to find a new leader.
Carney, meanwhile, praised the institution as one Canadians can be proud of.
“This is an incredibly deep, strong institution,” he lauded.
“The Bank of Canada will continue to serve Canadians, and continue to provide the excellence Canadians expect and merit the confidence Canadians have in the bank.”

More stories