Mark Carney's successor as governor of the Bank of Canada is not expected to implement a radical change in interest rate policy and most likely will hold the current underlying philosophy, which includes a hawkish attitude toward inflation.
Speculation has already begun about possible candidates to replace Carney, who announced on Monday that he will step down next June to become the next governor of the Bank of England.
But it's unlikely that the new Bank of Canada governor will diverge from Carney when it comes to setting interest rates here, says Louis Gagnon, a finance professor at Queen's University School of Business.
(STORY CONTINUES BELOW SLIDESHOW)
Daily Express: He looks like George Clooney!
Mark Carney may have been born in a tiny Canadian town but the man, who bears a distinct likeness to movie star George Clooney, is unlikely to fail the Britishness test when he makes his application for UK citizenship. <a href="http://www.express.co.uk/posts/view/360811/Mark-Carney-is-the-George-Clooney-look-a-like-with-links-to-Britain" target="_hplink">Read more...</a>
BBC: Carney faces many problems at BoE
When you look in the round at what Mr Carney has taken on, it is easy to see why he fled when originally wooed by Mr Osborne - because it is reasonable to ask whether any mortal can do this job. <a href="http://www.bbc.co.uk/news/business-20509027" target="_hplink">Read more...</a>
The Guardian: Carney means no change
Today the chancellor confirmed that there will be no real change at theBank of England. There will be no change to the Treasury and Bank of England's obsession with inflation targeting and "price stability". Above all, he confirmed that there will be no reining-in of the banks; that banks will not be re-structured - to separate the retail and investment arms, and ensure that banks are no longer too big to fail. He confirmed this by appointing an ex-Goldman Sachs banker, Mark Carney, as governor of the Bank of England. <a href="http://www.guardian.co.uk/commentisfree/2012/nov/26/mark-carney-appointment-bank-england" target="_hplink">Read more...</a>
Daily Mail: A big job ahead
The scale of the job facing Mr Carney is enormous. The independent Bank of England as established by Gordon Brown in 1997, was to be a narrow, monetary and interest-rate-setting body. The financial crisis of 2007-08 and recession that followed changed all of that.... The borrowings on the balance sheets of London-based banks are four times the size of the country's total output - giving an indication of the size of the task that lies ahead. Indeed, it was the sheer scale of the challenge that finally persuaded Mr Carney that it was worth doing. <a href="http://www.dailymail.co.uk/debate/article-2238939/Bank-England-governor-Mark-Carney-Sharp-tack--god-hell-need-be.html?ito=feeds-newsxml" target="_hplink">Read more...</a>
Daily Telegraph: Carney-mania takes hold
Is there any stopping Carney-mania? Those of us who 24 hours ago couldn't have identified Mark Carney, even if he was wearing a T-shirt emblazoned with "I'm the Governor of the Canadian Central Bank" in 110pt type, now stroke our chins and swap our best Carney insights. He was voted the most trustworthy Canadian in a poll conducted by Readers Digest (Canada). He has four children. He paid $800,000 for his house in Ottawa, apparently, although he undertook $95,000 of improvements. Did they extend out the back or convert the attic? I don't know, yet. And Canada didn't have a banking crisis, you know. Only it did, in the 1990s, and the recovery and reorganisation put it in place afterwards left it in good shape ahead of the much bigger financial crisis which hit the US and the UK particularly hard. And Canada knows how to regulate its banks, only that wasn't actually Carney's job. This is most of what we know so far. <a href="http://blogs.telegraph.co.uk/news/iainmartin1/100191554/carney-the-canadian-is-the-worlds-greatest-central-banker-since-alan-greenspan/" target="_hplink">Read more...</a>
Financial Times: Carney bound to disappoint
The new governor's problem now is that he is bound to disappoint. Unless by some miracle the British economy soon heads towards the sunlit uplands, those now so keen to lavish praise on Mr Carney will start asking whether Britain has got what it paid for. The media will ask awkward questions about his pay and perks; MPs will criticise him at once for not being tough enough on the banks and for choking off credit to small businesses. <a href="http://www.ft.com/intl/cms/s/0/ddbd273c-38b2-11e2-bd13-00144feabdc0.html#axzz2DRpaffMc" target="_hplink">Read more...</a>
The Independent: An outsider wins
So who are the City getting in Mr Carney? On paper he's an outsider, although he will seek British citizenship, but a look on his CV shows that the Square Mile is getting one of their own. A 47-year-old former Goldman Sachs veteran of 13 years, doing stints in New York, London, Tokyo and Toronto, he will have no trouble speaking to the bankers in a language they understand. After 10 years of Sir Mervyn and "the MA way", in reference to the monetary analysis unit which held sway as the central bank took on a decidedly academic bent, Chancellor George Osborne is drawing a stark line in the sand and setting a new course for the Bank of England. <a href="http://www.independent.co.uk/news/business/analysis-and-features/mark-carney-the-outsider-wins-again-8353060.html" target="_hplink">Read more...</a>
Daily Telegraph: A rift at the BoE?
Mark Carney, the incoming Governor of the Bank of England, has attacked Andy Haldane, one of its most senior regulators and a rising star, for failing to have a "proper understanding of the facts" on bank regulation... Mr Carney, who is chairman of the global regulator the Financial Stability Board (FSB), criticised Mr Haldane, the Bank's executive director for financial stability, for proposals he made to simplify bank regulation and encourage banks to break up. [Haldane's] proposals ran counter to Mr Carney's work at both the Bank of Canada and the FSB. In an interview last month with Euromoney, Mr Carney said: "I thought Andrew Haldane's speech was uneven... Basle I was simple and it drove us off a cliff. Andrew Haldane's conclusion is not supported by the proper understanding of the facts." <a href="http://www.telegraph.co.uk/finance/economics/9705748/Carney-attack-on-Haldane-hints-at-Bank-of-England-rift.html" target="_hplink">Read more...</a>
The Times of London: A political coup
The appointment of Mark Carney is a political coup. The decision is imaginative while also being safe. It is unusual but not unprecedented to appoint a foreign national to be head of a central bank. Stanley Fischer, Governor of the Bank of Israel, took Israeli nationality and renounced his American citizenship on his appointment. Mr Carney will similarly take British citizenship. <a href="http://www.thetimes.co.uk/tto/business/industries/banking/article3612926.ece" target="_hplink">Read more...</a>
The Independent: A British failure
If this appointment is a celebration of Britain's willingness to scour the worldfor people to run our great institutions - from football clubs to car companies - it is also an acknowedgement of our failures. In central banking this is in theory the third most important job in the world, for the US Federal Reserve and the European Central Bank naturally rank higher. But in practice it is arguably more interesting, partly because it is more wide-ranging, combining bank supervision with monetary responsibility, and artly because London's central role in international finance gives it global significance. <a href="http://www.independent.co.uk/voices/comment/george-osborne-chose-wisely-in-appointing-mark-carney-as-governor-of-the-bank-of-england-8352769.html" target="_hplink">Read more...</a>
"In this business you're either hawkish or dovish. Hawkish people are very suspicious of inflation and dovish people are slightly more accommodating. [Carney] is in the hawkish camp," Gagnon said.
"I think the Bank of Canada as an institution, not only the governor, but the body, is hawkish. I'd be very surprised if they were to select someone who has a different philosophy, because that person would not sit well with that group of people."
The Bank of Canada has a two per cent target for inflation, which means that if inflation should exceed that level, interest rates would be increased to keep it in check. With the Canadian economy growing slightly — the OECD yesterday predicted moderate growth for Canada in 2013 — inflation might go up as well, which means the next governor could end up raising interest rates.
The Paris-based Organization for Economic Co-operation and Development said in its report the Bank of Canada may need to start raising interest rates from near record lows by the latter half of 2013.
However, Gagnon said that such a move shouldn't be interpreted as a new governor having a different policy objective than his predecessor.
"If [Carney] saw that inflation rose consistently above the two per cent mark, he'd most certainly increase interest rates."
As for governor contenders, Gagnon said there's no pecking order right now and that it will be a long time before a shortlist is created.
He said the candidate must have a deep and solid understanding of the macro economy, the capital marketplace, financial markets and the overall banking system.
"Monetary policy is so crucial. It's central to everything. It establishes the short-term interest rate, which itself is the starting point of the credit marketplace.
"So credit markets take their cues from monetary authorities. And so you have to have a very, very solid understanding of all these dimensions," said Gagnon.
The board of the Bank of Canada vets candidates for the governor's job and comes up with a short list, from which the government chooses.
Finn Poschmann, vice president of research at the C.D. Howe Institute, said that with Carney leaving after just over five years in a seven-year term, there may be an incentive for the board to look for continuity.
This is one of the reasons that Tiff Macklem, the senior deputy governor at the Bank of Canada, has been suggested as a leading candidate. Macklem has been with the Bank of Canada for a number of years, and also spent time in the finance department.
"There's of course no shortage of qualified possible contenders. But with continuity an incentive, if not an imperative, then you look inside for an experienced hand," Poschmann said. "They don't have to look very far for someone with the right set of experiences, both through Tiff's work on previous jobs, including the department of finance."
If continuity is important, then Bank of Canada deputy governors Agathe Côté and Timothy Lane could also be up for consideration.
Another possible contender is Jean Boivin, the associate deputy minister of finance and former deputy governor of the Bank of Canada.
Don Drummond, TD Bank's former chief economist, who spent years in senior roles at the department of finance, could also be a candidate. But Drummond said on Monday that he wasn't interested in the job, Bloomberg News reported.
Economic analyst Patti Croft said Julie Dickson, who heads the Office of the Superintendent of Financial Institutions Canada, would be her top pick.
"Her experience, expertise on the regulatory side would be a wonderful addition," Croft said. "It's something Mark Carney was very interested in. It was one of his comparative advantages and she has it in spades."
Croft also said Stephen Poloz, president and chief executive officer of Export Development Canada, who is an economist with global experience, would be a good choice.
"The important thing is there's a remarkable pool of talent they can draw from," Croft said.
Related on HuffPost: