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Bank of Canada Governor Mark Carney waits to address the Canadian Club iThursday, November 8, 2012 in Montreal. (Ryan Remiorz/THE CANADIAN PRESS)
Bank of Canada Governor Mark Carney waits to address the Canadian Club iThursday, November 8, 2012 in Montreal. (Ryan Remiorz/THE CANADIAN PRESS)

Shock, speculation greet Carney’s move to Bank of England Add to ...

The following are comments and reaction on Monday’s announcement that Bank of Canada Governor Mark Carney will leave to join the Bank of England , effective July, 2013.

Patrick Honohan, Governor of the Bank of Ireland.

“I have the highest regard for Mark Carney and very much look forward to having him on the European central banking scene.”

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Craig Alexander, chief economist at Toronto-Dominion Bank.

“It’s a real shock Mark Carney’s going to be going to the Bank of England. It’s a real coup for the U.K. because they have a financial system that’s going through large-scale regulatory changes, the government’s going through a major fiscal re-balancing, and I think for the U.K. this will bring a fresh perspective to the monetary authority. But it’s a real surprise in Canada.

“From a financial market point of view, the focus now will be on who will be the new replacement for Governor Carney....I would say the internal front runner would probably be Tiff Macklem. He has the experience, he has a long track record at the Bank of Canada, he has a very robust understanding of monetary policy. The financial community is already very familiar with Tiff Macklem, he often does briefings on the financial system review and other releases...just in terms of internal BoC staff and looking at who has the experience that would probably make them the top internal candidate, I would suspect it’s Tiff.”

Julie Dickson, head of the Office of the Superintendent of Financial Institutions.

“Mr. Carney brings tremendous credibility in this new role and I will miss his counsel as a member of the team of government agencies in Canada that work together in support of a sound and stable financial system.”

Louis Gagnon, Queen’s University finance professor and former Royal Bank executive.

“This is highly unexpected and quite shocking because he had taken himself out of the running for the job. There is a lot of work to be done at the Bank of England. Mark Carney is the man to do it because he has the credibility, executive experience and the track record of a central banker.”

David MacDonald, CEO of Softchoice Corp.

“He has been an outstanding bank governor, and certainly [is a leader] from a communications perspective with the business community. But I think we have had a very consistent strategy to manage our deficits in Canada, and to manage our interest rates in a very responsible way, that I don’t think will be affected by his departure.”

Matt Campbell, CEO, Rocky Mountain Dealerships Inc.

“While I am sorry to see Carney go, we must recognize the career enhancement this is for him. What an honour for him and Canada, and a vote of confidence in this government’s fiscal agenda.

“ Unlike the Liberals who would appoint a governor based on a political agenda, this government is certain to pick a man who is truly fit for the job with the best interests of Canada in mind. I have no doubt that a replacement has likely been decided on and am confident the process will result in a good choice.”

Arlene Kish, senior principal economist, IHS Global Insight.

“Given his reputation and what he was able to perform here in Canada, that decision does not surprise me – just because of what he has been able to do for Canada, turn it around in terms of monetary policy...also the fact that he’s the chair of the Financial Stability Board, that gives him a lot of credence and a solid reputation to help transform what’s going to have to unfold at the Bank of England. [For Canada], it is going to be a loss...it all goes down to who would be his replacement...there’s always Tiff Macklem and any of the deputy governors. As long as they build the confidence in who new governor will be, so markets aren’t roiled, as long as the new governor has the same background and the same view as to where the economy is going, it shouldn’t be too much of a shakeup.”

Philip Cross, research co-ordinator at the Macdonald-Laurier Institute, former chief economic analyst at Statistics Canada.

Mark Carney’s “initial reaction to the [financial] crisis was appropriate. But five years in, at some point, you’ve got to be saying, is this working...and are low interest rates at some point causing more damage than we’re curing. I don’t think a quarter or half-point [interest rate hike] would have done anything other than to signal to people that the party’s coming to an end. This extended period of low interest rates is creating some structural problems for savers, pension funds, insurance companies and we should be attending to that as well.

Avery Shenfeld, chief economist at CIBC World Markets.

“Taking us by surprise, Mark Carney has indeed being appointed to lead the Bank of England, a rare move by a country that would seem to be suggesting that none of the U.K.’s many esteemed economists were worthy of the job. 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. Governor Carney has been somewhat hawkish in words, but dovish in action, in the past couple of years, but the absence of rate hikes since 2010 largely lines up with the absence of inflation pressures and the generally mediocre growth picture.

“In that sense, then, it’s unclear that any likely replacement would have a markedly different take on monetary policy in the near term, as Canada will still need faster growth than we’ve seen to justify higher rates, and an easing in rates would be similarly unlikely without an extended run of weak growth that would open up slack.”

Rick Waugh, CEO of Bank of Nova Scotia:

"I’d like to congratulate Mark Carney on his appointment as Governor of the Bank of England. During his tenure at the Bank of Canada he consistently encouraged dialogue with the private sector in order to address the ongoing challenges and opportunities. I believe his leadership and experience with Canada’s strong monetary and fiscal systems will serve him well in his new role, especially as he remains chair of Financial Stability Board."

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