Mark Carney, the 'unreliable boyfriend' who ran UK's central bank

Former Bank of England Governor Mark Carney is currently vying for leadership of the Liberal Party in his native Canada. What can his experience in London tell us? Carney took office in 2013, becoming the first non-British Governor in the Bank of England's 300-plus year history. Prior to this, he worked at investment bank Goldman Sachs and served as Governor of the Bank of Canada.

Carney took over as Governor of the Bank of Canada in 2008, just months before the peak of the global financial crisis, and his success in that role paved the way for his move to London. He has long-standing ties to the UK, having earned two degrees from Oxford University and married a British wife. During his time at the Bank of England’s Threadneedle Street headquarters, he oversaw major changes in how the bank operated. Early in his tenure, the Bank of England took on responsibility for financial regulation after the Financial Services Authority was abolished.

Carney is credited with modernizing the Bank of England, and he appeared in the media more frequently than his predecessors. In 2015, the Bank of England reduced the number of interest rate meetings from 12 to eight per year and began publishing minutes alongside the release of interest rate decisions. At the time of his appointment, interest rates were anchored at historic lows, but he introduced a policy of "forward guidance," where the Bank of England pledged not to raise interest rates until unemployment fell below 7%, further supporting the economy and encouraging lending.

However, the ambiguity of this policy led one MP to compare him to an "unreliable boyfriend," a moniker that stuck even after the initial controversy subsided. Unlike previous governors who typically kept a low profile, Carney made controversial interventions ahead of two major constitutional referendums. In 2014, he warned that an independent Scotland might need to cede power to the UK if it wanted to continue using the pound. Before the Brexit referendum, he warned that a vote to leave the EU could trigger a recession.

Following the Brexit vote, and shortly after then-Prime Minister David Cameron resigned, Carney addressed the nation in an attempt to reassure the public that the financial system would function as normal. He described it as “the toughest day” of his tenure but said the contingency plans the Bank of England had in place were working effectively. Subsequently, the Bank of England cut interest rates from 0.5% to 0.25% and restarted its quantitative easing program to support the economy. His final week in office, in March 2020, coincided with the start of the worst phase of the COVID-19 pandemic, and the Bank of England cut interest rates by 0.5% to support the economy, with Carney telling the nation that the economic shock “should be temporary”.

His experience at the Bank of England also gave him considerable experience dealing with Donald Trump, which would be very useful if he became Prime Minister of Canada. From 2011 to 2018, he chaired the Financial Stability Board, coordinating the work of regulators around the world and playing a key role in the global response during Trump’s first presidency. He regularly attended G20 meetings and witnessed first-hand Trump’s attempts to undermine the international order. In addition, Carney is known for his advocacy for environmental sustainability. In 2019, he became the UN Special Envoy for Climate Change and in 2021, he launched the Glasgow Financial Alliance for Net Zero, a group of banks and financial institutions committed to tackling climate change.