Carney faces a grilling over political goals

Tim Wallace
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INCOMING Bank of England governor Mark Carney faces tough questions from MPs after he was revealed to have seriously considered making a bid for a senior position in Canada’s centre-left Liberal Party.

Senior Bank staff tend to avoid giving either overt or implicit support to any political side, aiming to maintain a more independent position.

But Canada’s Globe and Mail newspaper found he was courted by the party as a potential leader, creating concern among British politicians and economists that Carney may not be committed to the role in the UK.

“The fact that Mark Carney was allowed to take a five-year term as governor rather than an eight-year term raised a lot of eyebrows,” David Ruffley, who sits on the Treasury Select Committee (TSC) of MPs due to grill Carney in February, told City A.M.

“One cannot fail to think a five-year term might be something he wants not for family reasons but because he wants to enter Canadian politics in five years’ time.”

Fellow TSC member Andrea Leadsom added it will come up at the pre-appointment hearing.

“It is not ideal that he is politically ambitious, but it is not as bad as if he was British, because political parties do not translate perfectly over borders,” she said. “But this may be helpful at the pre-appointment hearing, as it gives more of an insight into his political leanings, and we will question whether his actions will be influenced by any political ideology.”

Former interest rate-setter Andrew Sentance said Carney should clearly set aside any political views to reinforce his independence.

“Part of central bank independence is that senior officials are independent of the political system,” he told City A.M. “If they had allegiances in the past they should be very careful to distance themselves from those connections so as to be seen to fulfil their independent position.”

Carney took a week long holiday in a property owned by a senior Liberal figure, and reportedly spoke with other top politicians about taking the party’s leadership. But the Bank of Canada, which he currently heads, cleared him of any wrongdoing.