So, Mark Carney likely won’t be coming home next year, after all.
The former Bank of Canada governor once courted by prominent Liberals to lead their party has indicated that he’s willing to stay on as head of the Bank of England to see Britain through a possibly rocky exit from the European Union. British Chancellor of the Exchequer Philip Hammond is expected to take him up on the offer, extending Mr. Carney’s BOE stint into 2020.
If that happens, the Liberals will go into the 2019 federal election without the one megastar candidate who could draw enthusiastic support from concerned Canadians across the political spectrum. As this country faces its own rocky (and potentially post-NAFTA) future, unable to reconcile its economic interests with its environmental ambitions, Mr. Carney’s continued absence is regrettable.
Mr. Carney is not a professional politician, which is perhaps just what Canada needs right now. He has the stuff of a strong finance minister. Many engaged Canadians see him as a future prime minister and have been eagerly awaiting his return home.
It looks like they’ll have to wait even longer now. When he left for the Bank of England in 2013, it was supposed to be for five years. He extended that to six after British voters unexpectedly voted in 2016 to take their country out of the EU. Despite being an unabashed Brexit critic, Mr. Carney is seen in financial markets as such a steady hand that even a government hell-bent on Brexit understands that his departure in mid-2019 could make a bad situation even worse.
Britain has until next March to secure a Brexit deal with the EU. The talks are not going well. If Britain cannot secure an agreement that ensures access to the European market, either by maintaining a customs union or through a Britain-EU free-trade agreement, a so-called hard Brexit could send the economy and financial markets into a tizzy that could last for months. Having Mr. Carney around for a longer period is an insurance policy of sorts.
“In the event of no deal, there will be a grown up controlling monetary policy,” one economist told the Wall Street Journal on Tuesday after Mr. Carney informed British MPs of his offer to stay on.
Not everyone is thrilled. Hardcore Brexiters don’t like Mr. Carney pointing out the downsides of Britain going it alone. Others suggest he is clinging to the BOE gig because neither the International Monetary Fund nor the Canadian government currently has an opening at the top.
“There is a more cynical view of the governor: that a man who has said he did not want to move to the private sector might have difficulty at the moment finding a public-sector role to match his ambition,” the Financial Times' Chris Giles wrote.
Ouch. It’s not as though Mr. Carney's current job is a sinecure. By staying on through what promises to be an extremely risky period, Mr. Carney is putting his golden reputation on the line. He doesn’t have to do that. He could leave next year and let someone else deal with whatever Brexit mess is made by Prime Minister Theresa May, if her government lasts until then.
After all, plenty of Canadians would welcome Mr. Carney home with open arms. He led the Bank of Canada through the 2008-09 global financial meltdown, enabling this country to escape the worst of that disaster with an extra-accommodative monetary policy, coupled with then-Conservative finance minister Jim Flaherty’s massive stimulus spending. Canada was extremely lucky that these two men happened to hold the jobs they did when it mattered most.
Mr. Carney’s unparalleled understanding of how markets work and innovative thinking made him a critical global player as he and his fellow central bankers sought to root out the systemic risks that left financial institutions vulnerable to collapse. It won him notice and praise around the world, so much so that then-British chancellor George Osborne came calling in late 2012.
By then, Mr. Carney had already publicly ruled out running for the federal Liberal leadership, despite the entreaties of some of the party’s best minds, people who knew a thing or two about public service and the extraordinary economic, social and environmental challenges the country faced.
Those challenges have only grown greater since Mr. Carney’s move across the pond. And none of our current leaders seem to have a clue about how to address them.