Mark Carney has been governor of the Bank of Canada for a couple days without making any headlines. This is considerably better than the alternative.
Sure, we all have some questions about the type of central banker he's going to be (among other questions; assuming he didn't take five years for his Master's, how'd he kill time?). But speculating as to his character is fruitless, and he should be given the benefit of the doubt. I want to address a more general question.
I remain unconvinced that investment bankers should be running the central bank.
Now, I don't have a pathological hatred that most of them will likely earn more than I ever will if I end up in academia. But I remain unconvinced that anyone who is fundamentally part of the investment community should be running the BoC.
Maybe I should justify this belief? I'll give it a shot. The investment community is a very small part of the real economy. Yes, financial services are the biggest things in the economy, by market-cap, TSX weight, or whatever. And yes, I'm pretty sure a lot of banks add to the bottom line by playing with exotic trading instruments, but their fundemental strength is derived from the average Canadian who is happy with low-cost index funds and fixed income.
It seems that most investment types take this sort of news poorly. I mean, look at the American whining to rescue equity markets - whining which was indeed sated. Slate has a good article on this: The toddlers who are running the global economy. There is no law that says speculative losses will derail the economy, and I don't think they can, really.
Now, I'm pretty sure even if there come times when Carney caters to the TSX more than I'd personally care for, this doesn't mean the big bad seventies are coming back. By no means. But I'd much prefer someone who can push an agenda I think would be much more profitable in the long run than bailing out Bay Street; things like the stability of the time-path of prices.
(Another reason I'm concerned is that interest rates seem to be trending lower over time: at what point do we start becoming worried that there won't be enough fuel in the tank? Going into macro troubles with the bank rate at, say, 3%, doesn't leave much room for monetary stimulus.)
Anyway, I have no idea whether Mark Carney will use his post to grow investments rather than do other things. But given the nature of his comrades, I can't help but feel there's a much better chance for it than under Dodge.
POSTSCRIPT: I've tried to write this post at least six times by the drafts I just killed, and it's still not how I want it. The drift should be accessible.
POST-POSTSCRIPT: Super Tuesday not proving as decisive as thought, eh?