Mark Carney may have caught markets by surprise with his announcement Monday that he will resign early as head of the Bank of Canada to take the helm at the Bank of England. But for a man who made little secret of his ambition to be a major player on the global stage, this may be perfect timing – for him, if not necessarily for Canada's central bank.
Mr. Carney will be leaving his post about 18 months before his seven-year term is due to expire, at a time when his international star is shining as brightly as it's going to shine – and when his policies at home have gone about as far as they can go.
As he noted in his news conference following Monday's announcement, he was going to be looking for a new job anyway – he'll be just shy of his 50th birthday when his term ends, and he wasn't about to retire to writing his memoirs.
It is no secret that Mr. Carney is an ambitious, driven man. Unless he was going to move on to politics after his term ended – to become finance minister or even prime minister, about the only jobs that could conceivably interest him – there wasn't anywhere for him to move up without moving abroad. And though he has worked in the Finance Department, Mr. Carney has never expressed a desire to enter the political fray.
Yet he has shown a penchant for the global stage. His role as the head of the Financial Stability Board put him at the forefront of global efforts to reform the world's inadequate financial-sector regulations. He's been a leading voice on financial issues at G20 summits. His name was floated last year as a candidate for the head of the International Monetary Fund. In the past few years, he's become an international-finance rock star – and he's very comfortable with the status.
The Bank of England job was open, and British officials had Mr. Carney high on their wish list – something that was evident at least six months ago, despite denials on the subject from the Bank of Canada. A chance to run a highly prestigious financial institution with more than three centuries of history as a major power in global finance doesn't come along every day; Mr. Carney may rightly have believed that this was a once-in-a-lifetime opportunity.
He had already prepared the Bank of Canada for his departure – if not explicitly, then at least in rebuilding the institution's top management in his own image. In the five years since Mr. Carney was named as David Dodge's successor as Bank of Canada Governor, the entire old guard of deputy governors has been replaced; all four current deputies are people of Mr. Carney's own choosing, like-minded people who are in step with Mr. Carney's policy views.
But by the same token, Mr. Carney's policy approach may have won all the accolades it was going to win, both in Canada and abroad. While he has been lauded for keeping the country's economy stable and relatively healthy through a trying time in financial history, the next steps – getting Canadian household debts in check and avoiding a housing collapse in the midst of a slowing economy – look fraught with peril for even the most nimble crafter of monetary policy. Any missteps on that effort would not only hurt Mr. Carney's legacy at the Bank of Canada, but would damage his global reputation as a financial wunderkind.
It's going to be hard for Mr. Carney's successor to fill his shoes. But, then, it might have been hard for Mr. Carney to do so himself.
David Parkinson