Canada’s financial system emerged from the global crisis with a strong international reputation. Its banks avoided the all-out panic that struck in some jurisdictions. While they received important and timely liquidity assistance from government agencies during the worst months of the meltdown (through a C$200bn “Extraordinary Financing Framework”), no banks failed or needed to be taken over by the state. This relative stability has been an important strength for Canada’s economy in subsequent years.
Now the man who oversaw the Canadian system during this turbulent period is crossing the Atlantic to become the next governor of the Bank of England. Mark Carney took the reins of the Bank of Canada in February 2008 – just as the world system was sliding into crisis. By importing a Canadian central banker, will Britain also import Canadian financial stability?
Mr Carney is respected for both his credibility and his creativity(a rare combination in the staid world of central banking). However, Canada’s relatively positive experience in recent years ultimately owes more to the structure of Canadian banking regulation than to the traits of its top overseer. It is from this that Britain should learn.
