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Cablegate: Canada Names New Central Bank Governor

VZCZCXRO8313
RR RUEHGA RUEHHA RUEHQU RUEHVC
DE RUEHOT #1869 2781805
ZNR UUUUU ZZH
R 051805Z OCT 07
FM AMEMBASSY OTTAWA
TO RUEHC/SECSTATE WASHDC 6649
INFO RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCAN/ALL CANADIAN POSTS COLLECTIVE

UNCLAS OTTAWA 001869

SIPDIS

SENSITIVE

SIPDIS

DEPT FOR WHA/CAN, EB/OMA AND INR

USDOC FOR 4310/MAC/ONA

TREASURY FOR IMI (FAIBISHENKO)

TREASURY PASS FEDERAL RESERVE

E.O. 12958: N/A
TAGS: ECON EFIN CA
SUBJECT: CANADA NAMES NEW CENTRAL BANK GOVERNOR


SENSITIVE, BUT UNCLASSIFIED. NOT FOR DISTRIBUTION OUTSIDE USG
CHANNELS.

1. (U) Summary: Mark Carney, a 42-year-old rising star from
Canada's Department of Finance, will replace David Dodge on February
1 as Governor of the Bank of Canada. Carney has been Canada's
Finance Deputy at the G-7, G-20 and the Financial Stability Forum.
End summary.

2. (U) GOC Finance Minister Jim Flaherty announced Mark Carney's
appointment as the next Bank of Canada Governor yesterday in Ottawa,
flanked by Carney and current Governor Dodge, who indicated several
months ago that he would not seek a second 7-year term. The
announcement had been expected this month, and Carney had been
considered a front-runner, along with the Bank's current Senior
Deputy Governor Paul Jenkins.

3. (U) However, Carney, like Dodge before him, comes from outside
the ranks of career central bankers. Dodge had been an academic and
then a star Deputy Minister of Finance; he was credited with
managing then Finance Minister Paul Martin's successful assault on
the GOC's debt-deficit crisis in the early-to-mid 1990's. While
Carney, too, is a Finance star, his earlier career was in the
private sector with Goldman Sachs.

4. (SBU) Apart from scheduled interest rate announcements (the next
is due on October 16), the Bank of Canada normally receives little
press or public attention. However, credit market events of the
past two months, plus the recent appreciation of the Canadian dollar
to parity with its U.S. counterpart, have put the Bank in the
spotlight. Carney's appointment was highlighted accordingly in the
national media, with emphasis on Dodge's successful term and on the
role of the Bank in economic policymaking.

BIOGRAPHY
---------
5. (U) Born in the remote community of Fort Smith, Northwest
Territories, Mark Carney is the son of a high school principal who
later became a university professor in Edmonton, Alberta. Mark
Carney received a bachelor's degree in economics from Harvard
University in 1988. He then received a master's degree in economics
in 1993, and a doctorate in economics in 1995, both from Oxford
University. Carney had a thirteen-year career with Goldman Sachs in
its London, Tokyo, New York and Toronto offices. His positions
included Co-Head of Sovereign Risk; Executive Director, Emerging
Debt Capital Markets; and Managing Director, Investment Banking.

6. (U) Carney was Deputy Governor of the Bank of Canada for fifteen
months from August 2003 until his appointment as Senior Associate
Deputy Minister of Finance in November 2004. In addition to his
domestic responsibilities in the Department of Finance, he also
served as Canada's Finance Deputy at the G-7, G-20 and the Financial
Stability Forum.


COMMENT
-------

7. (SBU) Post received indications a few weeks ago that Carney might
get the Bank of Canada's top slot, but one Bank insider expressed
some surprise that Senior Deputy Governor Paul Jenkins had not been
named. Perhaps expressing central bankers' traditional reluctance
to embrace outsiders, our contact commented that Carney's background
lies in the "wheeler-dealer" atmosphere of investment banking as
opposed to the minutiae of central bank work. While one press item
tried to characterize Carney as "direct" and "arrogant" (in contrast
to Dodge's friendly, paternal style), we have found Carney to be not
only approachable, but also extremely competent and effective at
public outreach.
Qpublic outreach.

BREESE

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