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Mark Carney: The determined regulator Add to ...

Jamie Dimon’s confrontation with Mark Carney underscores the Bank of Canada chief’s growing prominence in the post-crisis push to overhaul the rules governing global banking.

Mr. Carney is widely considered to be the top candidate to run the Financial Stability Board, the group that will oversee the tougher regulations that have so angered Mr. Dimon, the chief executive officer of JPMorgan Chase. Which explains why Mr. Carney was the target of Mr. Dimon’s comments at a closed-door meeting in Washington last week, and why the central banker was there in the first place.

The fact that one of the most powerful figures in global finance cared enough about Mr. Carney’s views to lash him as he did – a couple of days before the Bank of Governor gave a speech rejecting the bank lobby’s claims, shows how influential he has become.

Part of that is because Canada and its officials are enjoying almost unprecedented gravitas on the financial and economic stage, having emerged from the recession better than most, with an almost blemish-free banking sector that was buffeted by sound regulation, and having hosted a Group of 20 gathering in Toronto last year as the European debt crisis was in its infancy.

Mr. Carney will attend a special meeting Tuesday with Prime Minister Stephen Harper Finance Minister Jim Flaherty, adding a sense of urgency to Canada’s response to the worsening global economy. The gathering in Parliament’s Centre Block is expected to focus on Mr. Flaherty and Mr. Carney’s meetings with the G20 and private sector bankers over the past weekend. Meetings between the three are rare, so it’s clear that Mr. Harper values Mr. Carney’s insights at times like these.

Outside Canada, an equally important driver of why Mr. Carney will help shape the debate over financial standards, regardless of whether he is tapped for the FSB job, is his own career path. Unlike most of his peers, he was an investment banker for 13 years – at Goldman Sachs in New York, London, Tokyo and Toronto – giving him the globetrotting, in-the-trenches experience and “street” credibility that make him impossible for his former peers to ignore.

“He understands where they come from, he understands how they think, he understands their logic, he knows what they might do next – because he once was one of them,” Ian Lee, a business professor at Carleton University in Ottawa, who is also a former banker. ``That’s what makes him so effective, and I’m sure Jamie Dimon knows all of this and more.’’ Mr. Carney’s remarks in Washington were just the latest example of how he has been unafraid, even eager, to push back against an industry where he spent the bulk of his working life. In June, 2010, just weeks before the G20 summit in Toronto, Mr. Carney said in a speech that fears about tougher capital and leverage standards harming the economic recovery were ``misplaced.” Months earlier, he warned Canadian banks against assuming that new global rules wouldn’t include standards that are more stringent than their own.

Mr. Carney also is in the second year of a three-year term as chair of a panel on the global financial system, run by the Bank of International Settlements in Basel, Switzerland, a research and policy collective of central bankers from around the world. That honour came a few months after Time magazine put Mr. Carney on its list of 100 most influential people, in part because of his vocal role in global efforts to tighten up the banking system.

Before he came to the central bank, Mr. Carney worked as the Finance Department’s chief negotiator at international economic gatherings. He also holds degrees from Harvard and Oxford, where he earned a doctorate in economics.

 

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