Canada wants BoC's Carney to be next FSB head

Mon Oct 3, 2011 12:08pm EDT
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By Cameron French

WHITBY, Ontario (Reuters) - Canada wants its central bank governor, Mark Carney, to become head of the Financial Stability Board, the country's finance minister said on Monday days after a highly publicized clash between Carney and one of the world's most powerful bankers.

"I would hope that that would happen," Finance Minister Jim Flaherty told reporters when asked if Carney would replace Italy's Mario Draghi as chairman of the FSB, a body comprised of global financial regulators.

"Mark is highly qualified. I certainly support and have taken steps to encourage this to happen and we'll see what happens," Flaherty said.

Carney would not have to step down as Bank of Canada governor to take the job.

The FSB was tasked by the world's top 20 economies (G20) to coordinate an overhaul of global banking rules after the financial crisis. Draghi is stepping down because he will become European Central Bank president in November.

Carney, a former Goldman Sachs banker, has been head of the Bank of Canada since February 2008 and has won widespread respect at home and abroad for his handling of monetary policy during the financial crisis.

The U.S. Federal Reserve appeared to borrow from Carney's play book in August when it gave unusually explicit guidance on how long it expected to keep interest rates at historic lows.

Carney also chairs the Committee on the Global Financial System, a group within the Bank for International Settlements (BIS) in Switzerland, that seeks to detect and respond to threats of instability in the global financial system.   Continued...

<p>Bank of Canada Governor Mark Carney listens to a question during a news conference upon the release of the Monetary Policy Report in Ottawa July 20, 2011. REUTERS/Chris Wattie</p>