Bank of Canada head Mark Carney is being considered by British Prime Minister David Cameron as the new Bank of England governor. Most individuals tied to the British central bank have been tainted by the Libor scandal.
The London Interbank Offered Rate (LIBOR) is the average interest calculated through submissions by major financial institutions in London. Dubbed as the Libor scandal, which accounts for approximately $350 trillion in derivatives, there were allegedly a number of fraudulent deeds committed.
British Prime Minister David Cameron may now need to hire an outsider that has had no affiliation whatsoever with the London central bank or the Libor fiasco. One name that is being tossed around to replace Bank of England Governor Mervyn King is Bank of Canada Governor Mark Carney, according to a story by Bloomberg News.
Carney, who received Masters and PhD degrees from Oxford University, has been universally acclaimed for his work in Canada, which is perceived as one of the G8 nations to survive the global recession. The Canadian central bank head worked in London when he was an employee of Goldman Sachs.
At a press conference this month, Carney told reporters that the Libor scandal is “deeply troubling.”
“It’s not just the structure of the index, which U.S. Federal Reserve Chairman Ben Bernanke has rightly described as flawed, but it’s the active, conscious, repeated manipulation of that index,” explained Carney. “My personal view is public authorities have to play a leading role in determining what next with Libor and if not Libor what else and how to manage that transition because there has to be absolute confidence in it.”
Though there are British candidates being considered for the job, such as Bank of England Deputy Governor Paul Tucker, former head of the British civil service Gus O’Donnell and Financial Services Authority chairman Adair Turner, many are citing Carney as the best man for the job.
“Mark Carney is one of the brightest, most capable people I've ever met in global finance and central banking," stated Tim Adams, a former U.S. Treasury undersecretary who worked with Carney at Group of Seven meetings, in an interview with the news outlet. "I've been around these circles a long time and he's smart, politically savvy, a good man-ager and has an outstanding track record. It's tough to find all those elements in a single person."
Carney first served as the deputy governor of the Bank of Canada in 2003 until 2004 when he was appointed to the federal Department of Finance as senior associate deputy minister of finance. He was tapped as central bank governor in 2008.
Since then, Carney has been credited with avoiding a financial collapse in Canada by having interest rates at their lowest possible levels, injecting additional liquidity into the financial system and supporting a number of regulatory initiatives.
In May of last year, Reader’s Digest magazine named Carney as “Editor’s Choice for Most Trusted Canadian.” He has also earned recognition from the Financial Times and Time magazine.