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Mark Carney Appointment: A Victory for Technocrats

Posted: 11/27/2012 12:48 pm

This piece first appeared in the Toronto Star.

The striking appointment of Mark Carney as the new governor of the Bank of England can be interpreted in a wide number of ways -- from a view that highlights the global governance dimension to British and Canadian-specific aspects of the story.

From a transnational perspective, Carney's appointment is another sign of the rise of free-agent technocracy in an age of crisis. Mario Draghi is another illustration of this phenomenon as witnessed by his move from the position as governor of the Bank of Italy and the chairmanship of the Financial Stability Board, to the presidency of the European Central Bank. However, Carney's move from the Bank of Canada to the Bank of England is more dramatic. Although Draghi was described by the mass-circulation German newspaper Bild as being the "most German of all remaining candidates" for the ECB presidency, Carney has moved across national jurisdictions in a much more explicit fashion.

Some critics of course will point to another shared characteristic of Carney and Draghi, their connection to Goldman Sachs, the formidable and often controversial investment bank. Akin to Draghi, who served as vice-chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002-2005), Carney moved in a 13-year career to a series of senior jobs: co-head of sovereign risk; executive director, emerging debt capital markets; and managing director, investment banking. Yet, if this is a common career path that fits with the notion of the dominance of a hegemonic transnational elite, it is also one that illuminates the triumph of meritocracy as Carney -- who was born in Fort Smith, N.W.T., to a high-school principal father and elementary school teacher mother -- is hardly a product of a privileged background.

STORY CONTINUES BELOW SLIDESHOW

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  • K Harazny

    Canada losing Bank of Canada governor Mark Carney to the Bank of England is a huge loss for our country.

  • Melton Blue

    George Osborne appoints Mark Carney to become the Governor of The Bank of England. Canada has done well under his stewardship.

  • William Cameron

    Mark Carney sounds like a good choice as next #BoE Governor and he has in addition the great advantage of not being Adair Turner.

  • Andrew Turmer

    Good luck to Mark Carney as the new BoE Governor. We can all forget about him never wanting the job.

  • Alex Ward

    If Queen on CN $, Carney gets visa. MT @gideonrachman: Mark Carney a great choice for Bank of England. Will the Home Office give him a visa?

  • Joel Taylor

    Well Mark carney speaks fluent French like a good Canadian should. Might help with relations with our European partners perhaps?.......

  • Tobias Ellwood

    Wise choice for new Bank of Eng Governor: Mark Carney. Unfamiliar, indeed rare mood in Chamber with whole House welcoming the appointment!

  • Derek Brower

    They noticed Canada's household debt levels when they appointed Mark Carney, right?

  • John Shmuel

    Mark Carney: "We have a good record here, a record of success in our financial system."

  • Leevan Aden

    Mark Carney did get his masters and doctorate in economics at Oxford after all.

  • Julianne Bowman

    Canadian Mark Carney to head up Bank of England! Well, staple me to a maple tree. #darkhorse

  • Robert Benzie

    Difficult day for Finance Minister Jim Flaherty, who is close to both @TOMayorFord and Mark Carney. #cdnpoli #onpoli #topoli

  • Andy Bruce

    Small list forming of Goldman alumni at Europe's big 2 central banks. Carney & Broadbent at BoE, obviously Draghi at ECB.

  • emily jackson

    Carney leaving? Ford thrown out of office? Just some casual news for us to wake up to in the west. AIIIEEE. #TOpoli #cdnpoli

  • David R Silva

    "He is acknowledged as the outstanding central banker of his generation," Osborne said of Carney. http://t.co/MmHJCLpP

  • Claire Schachter

    .@bankofcanada's Mark Carney dodges the Liberal leadership bullet and lands on the other side of the pond with style.

  • Ian Muller

    Carney leaving is a tough loss for Canada, but a significant validation of the Canadian central banking system #cdnpoli

  • Mantejd

    New BoE gov Mark Carney speaks in clear plain language! Understood exactly what he was saying on the @BBCnewschannel at his presser.

  • Luke Skipper

    "Canada was better than any other western economy during the crisis" Chancellor of the Exchequer #BoE #Carney #Ialwayshadfaith

  • Shirlee Engel

    NDP wishes Carney good luck for the future. Will watch closely who will be chosen. "Big shoes to fill" #cdnpoli

Indeed, it was precisely meritocracy (Harvard and Oxford education before his Goldman Sachs years) -- and outsider (Canadian) status -- that won Carney his appointment as governor of the Bank of England. Over the last month, the Financial Times has put out a series of articles attacking the embedded culture of the bank that made it ill-prepared to deal with the financial crisis when it hit hard in November 2008. Building on a number of independent reports, one former member of the court of directors and Monetary Policy Committee declared that drastic reform was necessary, including the appointment of "new people from the outside."

From a national perspective, the story can be interpreted as another example of a Canadian rushing off to the bright lights of London and the centrality of the United Kingdom -- a move up the hierarchy of nations. Although there are many questions to be asked about this transition (does Carney have to give up his Canadian citizenship, in a similar manner to Stanley Fischer giving up his U.S. citizenship when he took over as governor of the Bank of Israel in 2005?), it is unlikely that Carney took the job because of the prospect of more money -- why leave Goldman Sachs to become senior associate deputy minister, and G7 deputy as Carney did in 2004 -- or even a knighthood (as many governors of the Bank of England have so been honoured). It is more likely instead that Carney choose to leave because the position was more attractive for a free-agent technocrat.

If there is a danger to the Harper government, it concerns symbolic risk: the image of Canada being increasingly wrapped up again with the anglo world -- with shared embassies and now with the movement of a key individual who was able to talk directly to Canadians about financial questions leaving for the Bank of England.

There will be those preferring to believe Carney jumped jobs due to pessimism about the Canadian financial situation (the end of the housing market and resource boom), but a jump to the U.K., which is mired in austerity and a stalled economy, does not seem the easy option. If the job is attractive for a high flyer such as Carney, it is precisely because of the tougher level of difficulty he will have in his new position.

 
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