Carney's Future May Be Shaped by Trudeau's Canadian Election Win

BOE Governor Mark Carney.

BOE Governor Mark Carney.

hotographer: Simon Dawson/Bloomberg
  • Bank of England Governor due to stay in London until 2018
  • Liberals oust Harper's Conservatives with surprise majority

Prime Minister Stephen Harper isn’t the only loser in Canada’s election. 

Liberal-Party leader Justin Trudeau’s victory may have also closed the door to the nation’s top political office for Bank of England Governor Mark Carney.

Harvard-educated, Goldman Sachs-trained and now Bank of England Governor, Carney has long been touted as a potential future leader of the Liberals. Political canniness, a passing resemblance to George Clooney and forays into issues like income inequality and climate change have helped the 50-year-old reach beyond the typical central-banker audience, and fueled speculation his ambitions may also extend to politics.

“The thing about Carney is, he’s genuinely publicly minded,” Peter Loewen, a professor of political science at the University of Toronto, said in a phone interview. “If Justin Trudeau had flaked out, Carney’s chances of being Liberal leader would have been good, but that door has closed.”

Currently in London as the first foreigner to run the Bank of England, Carney has spent the past two years revamping the 321-year-old institution. His demand to shorten his term as BOE governor to five years -- rather than the standard eight -- fueled speculation that he would return home to Canada and seek political office.

Deft Touch

In London, he has tackled a wider range of issues than previous central bank governors. Last month, he warned investors that climate change is becoming a defining issue for financial stability and on Wednesday he’ll wade into the debate on the U.K.’s membership of the European Union by outlining the bloc’s impact on the economy and banking.

That mirrors the deft touch Carney showed as the political landscape changed in Canada, where he served as a top aide in governments of both the Liberal and Conservative parties before his appointment to the Bank of Canada. There he spoke on income inequality and came out in support of Occupy Wall Street.

His interactions with politics turned to controversy in 2012 after it became public that he spent part of his summer vacation at the Nova Scotia home of Liberal lawmaker Scott Brison. The central bank’s General Counsel ruled that no conflict of interest guideline had been breached by accepting the hospitality. The revelation caused tension with the Conservatives in government at the time, many of whom were already unhappy with Carney’s tendency to operate without their consultation.

Still Popular

Carney, who testified to lawmakers in London on Tuesday, has previously dismissed speculation that he has any political ambitions.

"I’m surprised that it would be suggested that taking one of the most challenging jobs in central banking in another country would viewed as politically advantageous in my home country,” Carney said in 2013 when he was questioned by U.K. lawmakers during a committee hearing. “If I had political ambitions, I would pursue them in Canada, so I think this is revealed preference that I do not have political ambitions.”

His popularity in Canada remains. There’s a “Canadians for Mark Carney” Facebook page that tracks his news clippings and in 2011 he was named "Most Trusted Canadian" by Readers Digest magazine. That star appeal led some Liberal organizers to approach Carney and urge him to run for the leadership of the party, the Globe and Mail newspaper reported in 2012.

The leadership of the party was eventually taken by Trudeau, who Monday led the Liberals to a surprise majority victory and a four-year mandate.

“He’s certainly made the shift towards politics,” said Kallum Pickering, an economist at Berenberg Bank in London. “There’s still scope for him to move over into Canadian politics -- it just depends whether he sees the opportunity as big enough.”

Carney’s focus on global themes pushes the boundaries of his purview as a central bank governor and has led to speculation his ambitions might extend beyond his home nation to the International Monetary Fund.

“Politically, an IMF position is always likely and it’s very hard for central bankers to turn those down,” Pickering said. “To take on a Canadian from a British central bank -- that’s the sort of thing that the IMF have a habit of doing.”

(An earlier version of this story was corrected to clarify Carney’s role as government adviser.)

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