OTTAWA—Bank of Canada governor Mark Carney has been chosen to run the Bank of England, beginning next summer.
Finance Minister Jim Flaherty called it a bittersweet moment as he announced Carney’s departure. He said he’s pleased to see Carney take on new responsibilities, but the governor will be missed at home.
The two men worked closely to deal with the recent recession and turmoil in financial markets.
“I am proud of the bank’s contribution to the resilience of the Canadian economy throughout an unprecedented period of global turmoil,” Flaherty said.
“The bank is helping to lead the reform of the global financial system.”
Carney’s handling of the recession and leadership won him respect across the world financial community.
Flaherty says it’s the first time a foreigner has been asked run Britain’s venerable central bank, which dates to 1694.
CIBC chief economist Avery Shenfeld called the appointment a rare move.
“For Canada, it’s a nice recognition that we’ve handled our monetary and regulatory affairs well enough to be recognized abroad, but it leaves a gap at the top of the monetary policy house here,” he said.
Carney said it’s an honour to take over in London.
“This is a critical time for the British, European and global economies; a decisive period for reform of the global financial system including its leading financial centre, the City of London; and a crucial point in the Bank of England’s history as it accepts vital new responsibilities,” he said.
Carney admitted he has a tough job ahead.
“The five-year term is the opportunity to see through the path of that reform, to see through the transition and the rebalancing of the U.K. economy and also to relaunch the Bank of England with its much expanded and vital responsibilities.”
Carney was appointed the eighth governor of the Bank of Canada in February 2008. He will stay on at Canada’s central bank until June 1 and move to his new job on July 1.
The Bank of England, one of the oldest banks in the world, is sometimes referred to as “The Old Lady of Threadneedle Street,” in reference to the London thoroughfare where it has been based since 1734.
The Bank of Canada will set up a search committee to find a new leader.