Mark Carney was convinced he would one day be a major force in Canada's National Hockey League. As a teenager, the son of an academic father would watch ice hockey great Wayne Gretzky slapshot his way to goal scoring records for the Edmonton Oilers, but the best he ever did was warm the bench as reserve goalie for the Harvard University team.
That's not bad, but not good enough for a highly motivated brainiac whose competitive steel led him to compete on high school quiz show Reach for the Top. It's no coincidence that Stephen Harper, the Prime Minister of Canada, is another to have taken their television bow on the show.
Having failed to reach the top of professional sport, Carney instead made the grade in the rarefied arena of central banking. Rather than facing vulcanised rubber pucks hurtling at him 100mph for a living, Carney last week found himself in the line of fiery questioning from a Treasury Select Committee: the MPs wanted to know how he could possibly be worth the £800,000 a year pay-and-perks package that Chancellor George Osborne OK-ed to lure him from Ottawa to succeed Sir Mervyn King at the Bank of England.
It's a shame that Carney's predecessor at the Bank of Canada, David Dodge, wasn't sitting alongside the 47-year-old on Thursday. While Carney handled the questioning well and coolly deflected the criticism, pointing out that Ottawa is an awful lot cheaper place to live than London [see box], Dodge would likely have told them that they get what they pay for.
Dodge, himself a surprise choice to take over the Bank of Canada in 2001, spotted Carney's work for Goldman Sachs in Toronto's Bay Street financial district, having asked for a transfer from the US so he could start a family back home. That he is now willing to take British citizenship, despite having an English wife he met when studying at Oxford, is therefore a bit of a surprise.
The now 69-year-old Dodge even told a friend at the time that he had found his successor and it is clear that he was very proud when his apprentice ascended to the top job in 2008. However, a senior economist at a British fund argues: "Dodge put a lot of the foundations in place, built the credibility of the Bank of Canada. Carney could be seen as the 'lucky' governor – though, like Napoleon and his generals, Osborne might want a lucky governor."
Carney's luck can be seen as he was a governor for a resources rich nation that has long-adhered to strict inflation targets – renewed before he took the top job. These were the main reason for Canada's almost unique success in navigating the financial crisis. Dodge, though, thinks there is more to Carney's success than good fortune.
"Mark's experience of the international scene and the macro-prudential scene domestically will be tremendously helpful when he's at the Bank of England," Dodge gushes. "Mark's a very good manager. And this is going to be a difficult management job: there can be a conflict between doing both a regulatory and a monetary job, that's always tough, a big job and not a typical job."
Carney's "mega-challenge", argues Dodge, is going to be oversee the integration of the Bank's new regulatory powers, such as supervising the banks to make sure they don't once more send the British economy into free-fall, with its traditional monetary policy powers.
It could even be argued that Carney's job is therefore twice that of Sir Mervyn's, though unlike the 64-year-old Aston Villa fan those managerial skills should at least mean he will be able to delegate. Sir Mervyn was regularly criticised for building so much of the Bank around himself. Danny Blanchflower, a former member of the Monetary Policy Committee and a columnist for The Independent, has even branded him "a tyrant who looks to his own advantage rather than that of his subjects".
Even one of Carney's greatest advocates admits that his reputation was "helped when commodities went up" during the financial crisis, with demand from Asia generally remaining high. However, Carney also didn't change Canada's 2 per cent inflation target when it was renewed on his watch in 2011, which seems to suggest he will maintain the Bank of England's stated goal of keeping prices down despite some off-the-cuff comments that read like he would pursue a growth agenda.
Carney could well have struggles within the Bank itself. Unusually, the MPC issued a statement with its no-change interest rate decision last week, saying that the Bank will reinvest the proceeds of £6.6bn in maturing gilts bought when quantitative easing started in 2009.
A source close to the MPC claims that as well as ensuring markets were not spooked by sitting on the money, which would be considered a sign that QE policy, colloquially referred to as "money-printing", might be tightening, this could also be seen as a warning to Carney: whatever your reputation, you must not change this course.
The source, one of many who question the rationale of continuing with a policy that hasn't proven to have salvaged an economy that could end up in a triple dip recession.
Carney, though, has already shown himself practical enough to avoid decision-making based on petty loyalties. In the select committee, he backed the Independent Commission on Banking (ICB) over his biggest fan, the Chancellor, on what leverage caps should be imposed on British banks. He agreed with the ICB that more of the banks' assets should be held on a bank's balance sheet than Osborne wants, who claims that this would be a costly amount – though both argue that these buffers are necessary to help the institutions absorb any further financial shocks.
Carney said: "If I had to pick one reason why Canadian banks fared as well as they did, it was because we had a leverage ratio."
As importantly, Carney also argued that research at his current employer shows that QE is faltering, so the MPC's claim that the policy boosts demand could well be flawed.
Carney might well have to strap on the protective goalie gear once more if he has to take on his new senior staff at the same time he is overseeing what could be a painful integration of the Bank's roles in the post-Sir Mervyn world.
A lot of the anger over Carney's remuneration package has centred around a £250,000 housing award. But that, actually, does not go that far in central London for someone who can expect reasonably comfortable accommodation.
After tax, that amount is likely to be under £3,000 a week to be used for rent. For example, he could splash out £2,850 a week for a three bedroom, lower-ground apartment in Knightsbridge that's currently being advertised by Foxtons but that would mean his four children might have to take bunk beds in two of them.
However, at least his kids would have access to a garden, a bit of a rarity in the capital's centre.Reuse content