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Robert Waite


Does the Governor of the Bank of Canada Have to Be Canadian?

Posted: 05/02/2013 12:21 pm

By all accounts, Finance Minister Jim Flaherty is on the verge of announcing the name of the new Governor of the Bank of Canada, less than a month ahead of the departure of current Governor Mark Carney, who is set to become head of the Bank of England on June 1.

We don't know for sure who will be tapped for the job (although Senior Deputy Governor Tiff Macklem is said to be the odds-on favourite). What we do know is that the individual will be a Canadian. No other nationalities were invited to apply. In case you missed it back in January, it said just that on the web site of Odgers Berndtson, the executive search firm tasked with doing the recruiting, as well as in an advertisement placed the pages of The Economist magazine.

In light of the citizenship requirement, the placing of an ad in The Economist seemed especially strange. With more than 94 per cent of that publication's 1.5 million circulation occurring outside Canada, the objective may have been to find a long-lost Canadian banker in Timbuktu...or in a dentist office waiting room somewhere else on the planet.

But, in 2013, does such a citizenship restriction even make any sense? Or is it just another manifestation of good, old-fashioned Canadian parochialism?

Why not emulate the Brits and just go after the best man or woman for the job, without regard to nationality? After all, not once but twice in recent years the U.K. has broken precedence and selected non-citizens for important, high-profile roles. And both were Canadians.

The first was Newfoundland native Moya Greene, who in 2010 left her position as CEO of Canada Post to become the first non-Briton and woman to head up the Royal Mail. And of course the second involves Mr. Carney's imminent investiture as Governor of the Bank of England.

Some will argue, given the state of the Royal Mail and the British economy, desperate times called for desperate measures.

But, whatever the circumstances, why wouldn't any nation wish to seek out and hire the best possible person for the job? If the Brits can get over themselves, why can't we?

And while hiring, say, an American as Governor of the Bank of Canada might be a (Peace) bridge too far, what about a Swiss, a German or a Singaporean? Or even an Australian, for that matter?

A few decades ago there was a popular expression meant to say that someone was stating the obvious -- "Is the Pope Italian?" The expression worked pretty well for several centuries...until the Pope became, in turn, Polish, German and Argentine.

Is the Governor of the Bank of Canada Canadian? Must he or she be?

While it is too late to re-write the job specs for Governor of Canada this time around, the nationality restriction should be dropped going forward. This could well still produce a Canadian winner -- but with the added benefit that he or she would be deemed the best candidate for the job in the world, not just Canada.

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  • 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>


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