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Canada will miss Mark Carney

Published on June 3, 2013 by in Politics

One could be all macho, and rely on Dan Mida’s comforting words when Tye Burt quit Nesbitt Burns in 1997 to join another dealer. Mr. Mida summed up Bay Street’s HR dynamic very well with this simple line: “People come and people go.”

When it comes to former Bank of Canada Governor Mark Carney, I can’t say I’m taking much solace from my former Bosses’ truism. I mean, Mr. Carney’s only been gone a couple of days and we already miss him. Not noticeably just yet, of course. Just last week, RBC Economist Mark Chandler used this headline to describe the recent Bank of Canada rate announcement: BoC’s Carney goes quietly into the night, rates unchanged. And yet, how quietly did Mr. Carney go, really?

I first got interested in our former Governor when he was appointed in 2007 (see prior post “The subtext of the new Bank Governor’s appointment” Oct. 12-07). Despite never having met him at that point, I saw him as a “change agent” and was hopeful that his Capital Markets’ insight could be applied to modernize Canada’s regulatory regime. Here’s a bit of what I wrote almost six years ago:

Given the summer we’ve had in the credit and financial markets, the timing couldn’t be better. With OFSI pointing fingers at DBRS, yet not taking responsibility for their own role in the asset backed commerical paper (“ABCP”) fiasco, it is the perfect time for a fresh look at how our regulatory system is structured. With a new Bank Governor, who is easily young enough to complete two 7 year terms, who better than Mark Carney to bring some sense to an antiquated system?

Over the past hundred years, our financial system has changed dramatically. Yet the oversight bodies are stuck inside their historic fences. What’s OFSI’s role with the proliferation of financial players, not all of whom are regulated at the national level? Is the Bank of Canada merely here to issue the currency and set the bank rate? In the absence of a national securities regulator, who has the role to head off things like the $45 billion ABCP disaster (see post “Where’s the Bank of Canada on Coventree stumble?“, August 14-07)? Currently, no one seemed to have been “point” on it.

And the consequences are entirely made-in-Canada.

That’s just one obvious example of the types of issues Mark Carney will undoubtedly be thinking about when he assumes the mantle in February. It’ll take some deft stick-handling to bring monumental changes to the way the Bank and OFSI function, but for a guy who made it from Fort Smith to Harvard to Goldman to the Bank of Canada’s top job in less than 20 years, it should be a snap.

We’re rooting for you.

Once the financial crisis was over, the penny dropped for me by late 2009. Mr. Carney’s talents were being wasted at the Bank of Canada. This was long before the Ottawa Press Gallery, Scott Brison or British PM David Cameron twigged to Mr. Carney’s diverse toolkit. It took me a while to spread the word, however. Here are a few of my blogs during his tenure:

Governor Carney’s future political career looking good Sept. 10-10

In the absence of any negative immediate fallout from Mr. Carney’s rate hike, his sober stewardship at the BoC continues to serve as a fabulous springboard to Parliament Hill. The Star, which admires political bravery and leadership, will hopefully trust his judgment on this one.

Carney strikes a populist tone Sept. 16-10

Although his aspirations may be hidden from view, I have my eye on a future political candidate (see prior post “Governor Carney’s future political career looking good” Sept 10-10). He probably doesn’t even know that he’ll be running for office at some point down the road, at least not consciously.

But subconsciously, I think he’s allowing himself to morph into a very talented pol-in-waiting. Bank of Canada Governor Mark Carney’s speech earlier this week sounds like a starter’s gun to me (hat tip Barrie McKenna at the Globe). The topic was the new bank capital requirements, and Governor Carney — in not so many words — practically set fire to the desks of senior Bay Street bank execs (excerpt of Globe piece):

How about Carney as Minister of Economic Transformation? Feb. 8-11

Which brings me to the big idea. It isn’t as tangible as a National Railway, nor as immediate as national daycare or a Guaranteed Annual Income policy, but it should ultimately be as important as anything churning away within the bureaucracy right now: Canada needs to transform its economy. This is not in dispute. We prop ourselves up on the crutch of natural resources, and their growing global importance has made the Canadian dollar strong for the past couple or three years.

Ironically, it is that very strength that means Canadian software firms and industrial product manufacturers are finding the U.S. market harder to sell into than in recent memory. Exacerbating the country’s reliance on resources, at the expense of other parts of the economy.

A small nation like ours can’t do much to fight global forces of currency and capital. But, as Sir Terry Matthews said last Tuesday in Montreal, we can adapt — as Darwin would advise.

There’s no team that doesn’t benefit from added strength and gravitas. Prime Minister Harper sent that message when he recruited Julian Fantino to run in a tough Toronto-area riding. Which brings me to Canada’s “Minister of Economic Transformation” in-waiting. This isn’t the first time I’ve promoted the idea of Bank of Canada Governor Mark Carney getting into the political ring (see prior post “Governor Carney’s future political career looking good” Sept 10-10). But, as my friend Bill Liaskas would say, “I don’t go where I’m not invited.”

It’s time for the Governor to be invited to cross the chasm.

The fact that, two years later, it was Liberal MP Scott Brison who was broadly “inviting” Mr. Carney to cross the chasm to the Opposition benches merely means that there are no novel ideas (see prior post “Enough of this Mark the Great Liberal Hope blather” Sept. 28-12). That England’s call trumped running for the Liberal Leadership against Justin Trudeau will work just fine in the end for Mr. Carney, however real or not the Liberal political footsy was. But to read the gory details in the nation’s newspapers last Fall speaks to the perils of picking the wrong political bedfellows.

I know many of Mr. Carney’s Canadian fans will say that the five years will pass before we know it. Sitting on the political shelf too long is dangerous, as Paul Martin discovered. But any former Wall Streeter who can deliver a tough speech about the facts of life to the Canadian Auto Workers General Assembly and leave the podium to the sound of a standing ovation isn’t just another run-of-the-mill political candidate. The fact that Mr. Carney has kept his house in Ottawa is a good sign that he really will return at the end of his Bank of England term. Much will change in half a decade, but Canada’s ongoing need for smart, sober, engaging and energetic people who are attracted to public service will remain as acute as ever.

(disclosure: this post, like all blogs, is an Opinion Piece, and as a personal view should not be taken to represent the views of the TPA board, management or the Federal government)

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