Market knowhow could help Bank of Canada's Carney

Mon Apr 20, 2009 1:36pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Louise Egan

OTTAWA (Reuters) - Mark Carney will need all his market smarts to lead Canada's central bank as it considers unprecedented action to breathe life into an anemic economy, after already slashing interest rates to almost zero.

Carney, just a year into his seven-year term, was a controversial appointment as Bank of Canada governor, in part because of an career path that included a 13-year stint at Goldman Sachs, rather than the decades-long public service career that most of his predecessors followed.

But that expertise in financial markets will pay off for Carney and his team as the central bank lays out a framework for measures that could include expanding the money supply to buy securities in the market.

"You could certainly say he's had a baptism by fire in terms of coming on as governor just at the moment when the crisis broke," said John McCallum, a Liberal legislator and former chief economist at Royal Bank of Canada.

The bank sets interest rates on Tuesday, and on Thursday it will update its economic outlook in a report that will also detail possible nonconventional measures -- known as quantitative easing -- to prime the monetary pump.

McCallum, who worked with Carney at Finance Canada when the Liberals were in power, said he never doubted the ambitious young economist's abilities as the country's top banker.

But others did have doubts, either because his young age suggested inexperience -- he turned 44 in March -- or because they thought his Goldman Sachs background would make him too sympathetic to bankers' needs.

Carney, a father of four young daughters whose earliest ambition was to play professional ice hockey, worked for Goldman in London, Tokyo, New York and Toronto after graduating from Harvard. He has a doctorate from Oxford University.   Continued...

<p>Bank of Canada Governor Mark Carney waits to testify before the Commons finance committee on Parliament Hill in Ottawa in this February 10, 2009 file photo. REUTERS/Chris Wattie</p>