(November 28, 2012) — The financial community is full of ex-pats moving to New York or London looking to gain international banking or investment experience which either helps them move up the corporate ladder or move on to the next job.
But policy leaders—often government appointees and at the center of monetary and fiscal policy—are rarely, if ever, chosen from outside a country’s borders.
Not so in the case of the Bank of England. For the first time in more than 300 years, the central bank has hired a foreigner to manage it—in this case, Canada’s Bank of Canada Governor Mark Carney. Carney, in his home country, is considered a steady hand and has been praised for his navigation through the economic crisis of 2008-09. Inflation remains low and although Canadian debt levels are high, the economy has fared better than most of the G-7 countries.
While his departure had been rumored for months, Carney’s acceptance of the position with the Bank of England came as a surprise to many in the Canadian financial community.
Leo de Bever, chief executive officer of the Alberta Investment Management Corporation (AIMCo), says Carney’s departure is a loss for Canada but that he is qualified for his new position in England. “Carney was very important to us in the 2008 crisis,” notes de Bever. “In a very unusual move, he was willing to provide emergency liquidity to organizations like AIMCo much the same way as he would for banks. Just knowing that it was there allowed me to sleep better,” he added.
And while his departure is not causing too many waves, there are still questions as to who might replace him.
“In the short run, Mark’s departure won’t have much effect on Canadian institutional investors,” says Jim Keohane, president and chief executive officer for the Healthcare of Ontario Pension Plan. “Mark’s handling of the financial crisis and the policies he has implemented has put us on a solid footing and that won’t change in the short-term. In the long-term, it depends on the replacement and whether the markets have the same confidence in the new governor as they had in Mark.”
Keohane adds that while losing Carney is a negative for Canada, it is a positive for global markets where he can have a more direct influence. “We operate in global markets, so it is positive to have Mark in his new position where he will have a more prominent role to play in influencing those global markets.”
Generally however, the institutional investment community in Canada is taking the news in stride. Michael Nobrega, the Ontario Municipal Employees Retirement System’s president and chief executive officer remarks, “Canada’s price stability and monetary policies have gained international respect under Mr. Carney and this appointment is further evidence of that reality.”
Joel Kranc is the director of Kranc Communications in Toronto, focusing on business communications, content delivery and marketing strategies.
Contact him at: joel@kranccomm.com