OTTAWA (Reuters) - Bank of Canada Governor Mark Carney will chair a committee of global central bankers tasked with detecting and responding to threats of instability in the global financial system, the bank announced on Tuesday.
For three years starting July 1 Carney will preside over the Committee on the Global Financial System (CGFS), replacing U.S. Federal Reserve Vice-Chairman Donald Kohn, who is retiring.
The CGFS is one of the committees within the Bank for International Settlements (BIS) in Basel, Switzerland. It serves as a hub for central banks to discuss and share research and policy ideas.
“I look forward to maintaining the excellent reputation that this committee has built under Don Kohn’s leadership,” Carney said in a written statement.
“Its work will contribute importantly to identifying systemic trends and vulnerabilities and to advancing global financial system reforms,” he added.
Carney is a rising star in the world of central banks, overseeing a famously resilient banking system and an economy that has recovered so swiftly from recession that he became this month the first central bank chief in the G7 advanced economies to start hiking interest rates after the recession.
Carney was named one of the world’s most influential people by Time magazine earlier this year, and the former Goldman Sachs investment banker’s appointment reflects a vote of confidence from 30 of his peers at a weekend meeting in Basel.
Carney received a baptism by fire after taking the helm at the Bank of Canada in 2008, just in time for the global credit crunch to hit.
Although he wrongfooted markets once on a rate move and came under criticism for what many saw as unrealistically rosy forecasts, his performance during the crisis has since won him plaudits from politicians and Bay Street investors.
Under his leadership, Canada’s central bank pumped billions of dollars into money markets through emergency facilities to keep banks lending and slashed interest rates to a historic low. But unlike the United States and Britain, Canada did not resort to purchasing bonds in the market.
Carney has been involved in global efforts to revamp regulations for banks and financial markets to prevent future crises, and will continue that work as chair of the CGFS.
The committee, which has 23 institutions as members, helps central bank governors develop policies to counter risks to the global financial system.
Reporting by Louise Egan; editing by Peter Galloway