OTTAWA – Bank of Canada governor Mark Carney was attending a G20 meeting in late February when he got an unexpected and tempting offer.
British Chancellor George Osborne approached the Canadian central banker on the margins of the international discussions and asked him if he would be interested in becoming governor at the Bank of England.
Even though Carney is not a British citizen and no non-Brit has held the post in the storied 318-year history of the institution, the offer was not as outlandish as it might have appeared to outsiders.
In the world of central bankers and finance ministers, Carney had become something of a superstar during the five years he was in command of the younger and less prestigious Bank of Canada.
He had impressed colleagues with what Time magazine called his “whip smarts” and passion for pushing through financial reforms to corral the super-banks that had brought the world to the brink of a financial and economic ruin.
He may have come from Goldman Sachs, but Carney was on the side of regulators in the fight against too-big-to-fail banks that were still resisting reforms. And he won plaudits after verbally wrestling fearsome Wall Street giant Jamie Dimon of JPMorgan Chase to the ground on the issue.
An ad for the top job at England’s top job went into the Economist and other international publications.
“The successful candidate will have experience of working in, or with, a central bank or similar institution; or will have worked at the most senior level in a major bank or other financial institution. He or she will demonstrate strong leadership, management and policy skills; will have an advanced understanding of financial markets and good economic knowledge.”
“He or she will be a strong communicator, have good interpersonal skills and will be a person of undisputed integrity and standing.”
Osborne, who was looking for new direction at the Bank of England and a candidate to fix England’s scandal-plagued banks, thought he had found his man.
As he told the British parliament on Monday: “He is quite simply the best, most experienced and most qualified person in the world to be the next governor of the Bank of England.”
As for being an outsider, Osborne said Carney would take up citizenship, and Carney noted he had planted roots in England while working with Goldman Sachs.
“My wife is a British and Canadian national. My children are both. I’ve lived there for a decade. I know a lot of people in the city, in the industry, in the United Kingdom,” he said.
Carney must have been tempted: a big job, prestige, London. The challenge of Europe in financial turmoil.
But still, he said no. He still had almost three years left in his seven-year term, and there was the question of his family. He had four young daughters in school. A move would be complicated.
He did not tell Finance Minister Jim Flaherty or Prime Minister Stephen Harper of the initial offer.
When the news broke in London’s Financial Times that his name was up for consideration, Carney responded with the kind of precision that would make a lawyer blush.
“The report is not accurate,” he said, ignoring the pointed question he was asked. “I’m absolutely focused on doing my roles, the most important of which is as governor of the Bank of Canada.”
Later he would be more explicit on the question as to whether he would take the job. He said no.
Still, the big job beckoned, and Osborne had not changed his mind. And the offer undoubtedly sent Carney’s wheels spinning about what he would do after leaving the Bank of Canada when his term ended in early 2015.
The Liberal party was looking for a new leader, but if Carney had an interest, the timing was atrocious. There would be no way to justify abandoning his duties to keep the Canadian economy on an even keel, and leading the global effort on financial reform as head of the Financial Stability Board, for crass politics.
Then Osborne returned. British commentators suggested Monday the chancellor was not happy with the choices before him to replace the outgoing Mervyn King, and he still wanted the Canadian.
At Monday’s news conference, Carney suggested the overtures from London continued sporadically, then intensified in the past two weeks.
This time he was ready to say yes, under the right circumstances.
“What changed my view on doing this (is) I had an opportunity to reflect on where this institution stood, where the Bank of Canada stood, where our economy stood, and all the strengths that are there,” he said.
“I weighed that against the challenges that are faced in the British economy.”
This time, he told Flaherty and Harper. They said they understood. Along with his time as a bureaucrat in the Department of Finance, Carney had given 10 years of his life to Canadian public service when he could have been piling up millions on Wall Street or in London.
“We had a meeting and he told me,” said Flaherty. “This was a bit of a different meeting, but I understand the reasons for the governor doing this.”
Still, Flaherty said the news was “bittersweet.” He is happy for Carney and believes he will make a difference in England, but “it is our loss, of course it is.”
The appointment in England is for five years, rather than the usual eight. That should suit Carney’s career arc.
When that job is done, he will be 53. He will be young enough to do something else. He is said to have little interest in sitting on corporate boards or making boatloads of money. He will be young enough to do almost anything he wants — including taking a run at political life should that itch still need to be scratched.
Take it from someone who has run for the leadership of the Progressive Conservative and the Liberal parties.
“Mark Carney has a lot of runway ahead of him,” said Scott Brison, currently the Liberal finance critic. “He would be successful in any job whether it’s in the financial world or in politics.”
