Carney dismisses persistent Bank of England rumours
Published Wednesday, August 8, 2012 10:01PM EDT
Last Updated Thursday, August 9, 2012 8:35AM EDT
Canada’s chief banker Mark Carney is quashing old rumours that he’s been approached to head up the Bank of England, saying he’s committed to his role as Bank of Canada governor.
“I have my job…and I absolutely intend to fulfill that role,” Carney told CTV’s Chief Anchor and Senior Editor Lisa LaFlamme in London.
Amid growing panic over Britain’s double-dip recession, the British press has resurrected previously denied reports that Carney is a potential candidate to replace Bank of England Governor Sir Mervyn King next year.
Carney, who also chairs the international Financial Stability Board, said the British government has “many options to fulfill that role,” but he is not interested.
Instead, Carney said he’s focused on pressing economic issues both at home and abroad.
Because Canada’s solid banking sector and economic policies helped the country weather the global recession, as the Organization for Economic Co-operation and Development has noted, we are now in a good position to focus on foreign markets, Carney said.
While the United Kingdom and the United States are still devoting resources to fixing their financial systems, Canada can work on expanding its foreign market share and forging new trade deals, he said.
“The negative or the reality is that we've been much less successful in the past than the United States or the U.K. in penetrating these markets,” he said. “I'll just give you one fact: only nine per cent of our exports go to the fastest growing economies in the world.”
Doing more business with countries like China -- a major player in the global economy -- would benefit various Canadian industries, Carney said. But he won’t wade into the debate over exporting Canadian oil to Asian markets via the proposed Northern Gateway pipeline.
“It is not my role or the bank’s role to endorse particular projects or particular firms,” he said. “There are many options to grow our energy sector in Canada.”
Opportunities exist not just around the world, but also within our own borders, Carney said.
“Consumers in Central and Eastern Canada pay a lot more for their oil than producers in Western Canada receive for producing that oil. That is a difference that we can solve within our own country. That's one example,” he said.
Potential trade partnerships with “emerging markets” also need to include Canada’s shrinking manufacturing sector, Carney said.
“The fact is…our manufacturing export share globally has been cut in half over the past decade because the major growth in manufacturing exports has been in emerging markets. And we’re not present,” he said.
The fact that Canada’s “economic fundamentals” are strong compared to the rest of the world is a good start, Carney said. The Canadian dollar has also performed well on the stock market, reaching parity with the U.S. dollar this week.
“There’s relatively few places in the advanced world that investors can put their money with a degree of certainty that something catastrophic is not going to happen,” Carney said. “Canada is very much in the safe-haven category. So our challenge as a country is how do we use that capital that comes in?”
Instead of building houses, he said, Canada should invest in new “productive assets.”
Carney has previously warned of “overbuilding” and the growing burden of household debt.
Meanwhile, he said economists and policy makers still need to carefully watch the situation in Europe, which has had ripple effects around the world.
He said it will take years for the continent to bounce back from the eurozone crisis that saw the near-collapse of Greece’s economy and mass youth unemployment in countries like Spain.
At the end of the day, however, Canada needs to look after its own interests, Carney said.
“We can't solve the euro crisis for the Europeans. We can't fix the U.S. fiscal situation,” he said. “What we can change is how productive our businesses are and we can change the markets into which we sell.”