Bank of Canada Governor Mark Carney has been tapped to lead the Financial Stability Board, taking charge of the G20's efforts to improve banking regulation and oversight.
Carney's appointment was expected out of the G20 meetings in Cannes this week, and the announcement was made Friday morning in a G20 communique.
"It's certainly a feather in Canada's cap. Very rarely do we get Canadians in charge of global financial institutions," said CTV's Ottawa Bureau Chief Robert Fife.
Carney replaces Italian Mario Draghi, governor of the Bank of Italy. The FSB role is part-time, and Carney will continue to head the Bank of Canada.
"This is a part-time job so obviously he's going to be very, very busy dealing with the European situation," Fife told Â鶹´«Ã½ Channel in a telephone interview from Cannes, France.
As FSB head, Carney will act as a financial enforcer. During his three-year term, he'll be in charge of ensuring that strict regulations exist so the economy and world's biggest banks don't tumble into the type of calamity seen in 2008.
Carney's new role comes amid wide speculation and months of quiet but forceful campaigning from Canada's finance minister, said BNN reporter Michael Kane.
"Mr. (Jim) Flaherty put forth Mr. Carney's name just this past summer and really did lobby heavily," Kane told Â鶹´«Ã½ Channel.
Almost prophetically, Carney told reporters in September that many people thought a Canadian would be best-suited for the FSB job.
In a prepared statement, Carney said he was honoured to assume his new role.
"My appointment reflects the strong reputation of Canada's financial system and the leading role that Canada has played in helping to develop many of the most important international financial reforms," he said in the news release issued Friday.
This isn't the first time Carney has been considered to take the helm of a global organization.
His name was reportedly on a list of candidates for the top job at the International Monetary Fund (IMF), a role that went to French lawyer Christine Lagarde.
Philipp Hildebrand, chairman of the Swiss National Bank, was named as Vice-Chairman of the FSB.
"Building on its achievements, we have agreed to reform the FSB to improve its capacity to coordinate and monitor our financial regulation agenda," the G20 said in a statement. "This reform includes giving it legal personality and greater financial autonomy."
A blunt approach in uncertain times
Carney's appointment comes against the backdrop of a eurozone debt crisis and mounting uncertainty about what will become of Greece's economy.
"What he has now on his agenda is very major because the world is facing potential financial chaos if they cannot get their act together in Europe," Fife told CTV's Canada AM on Friday.
Flying in the face of Canadian stereotypes, the 46-year-old Carney has built a reputation as a blunt speaker who isn't afraid to offer frank criticism to the world's financial heavyweights.
He demonstrated that candour last month when he criticized American bankers grumbling at the creation of new rules.
"Getting financial regulations in place is absolutely crucial," said Fife. "Mark Carney is no doubt the guy who can do it."
Carney began a seven-year team as Governor of the Bank of Canada in February 2008.
Carney started his education with a B.A. in economics from Harvard, then went on to earn his master's and doctorate degrees at Oxford.
In the private sector, Carney spent 13 years at Goldman Sachs in offices in London, Tokyo, New York and Toronto, eventually becoming a managing director of the firm.
He served as Deputy Governor of the Bank of Canada from August 2003 until his appointment as Senior Associate Deputy Minister of Finance in November 2004. He has also served as Canada's Finance Deputy at the G7, G20 and the Financial Stability Forum.
Last year, Time Magazine ranked Carney as one of the most influential people in the world.
He'll now be able to flex that influence at the FSB, acting as a global banking cop to the world's largest financial bodies.
According to the Financial Stability Board's charter, the board's purpose is "to coordinate at the international level the work of national financial authorities and international standard setting bodies (SSBs) in order to develop and promote the implementation of effective regulatory, supervisory and other financial sector policies."
The charter goes on to state that the board will collaborates with other international financial groups to "address vulnerabilities affecting financial systems."
The FSB watches over the world's biggest financial institutions — none of which are Canadian.
