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It takes guts to stand up in a room full of distinguished men and women and tell them their opinions are ridiculous. This is not a problem for Bank of Canada governor Mark Carney.

In late September, he stood in just such a room at Washington’s Institute of International Finance and publicly criticized the organization’s own report contending that reforms to the financial system were hampering economic growth. Carney offered a sarcastic, “Really?” then pointed out that new regulations won’t take effect for another two years. “If some institutions feel pressure today,” he said, “it is because they have done too little for too long, rather than because they are being asked to do too much, too soon.”

The speech makes obvious Carney’s appeal. He’s intelligent, never lapses into econo-babble, and is a vocal advocate for regulation to lessen the chances and damage of another financial crisis. But while plenty of officials and politicians fit that description, Carney has developed an unusually high profile. In 2009, the Financial Times named him one of 50 who will “frame a way forward.”

Last year, Time called him one of the world’s 25 most influential leaders. (He’s also “smart and sexy,” according to the magazine, a descriptor surely never before applied to a Canadian central banker.) And in May, Reader’s Digest declared him the most trusted Canadian. Beyond the media infatuation, Carney has earned his share of professional accolades, too. Most recently, his name has been floated as the next head of the Financial Stability Board, an international body of regulators and central bankers crafting financial market reforms.

So what is it about Mark Carney? At 46 years old, he is accomplished, to be sure. His resumé—boasting a PhD in economics from Oxford and 13 years at Goldman Sachs—puts most of ours to shame. But Carney has also benefited from circumstance. The Canadian financial system and economy fared better than most during the recession, and he wasn’t forced to respond as dramatically as were other central bankers. Compared to the problems faced by Ben Bernanke at the U.S. Federal Reserve and outgoing European Central Bank president Jean-Claude Trichet, Carney’s tenure has been a cakewalk. “Any governor of the Bank of Canada during this confluence of circumstances would have looked good, simply because the Canadian economy and banks looked good,” says Rotman School of Management professor Laurence Booth.

In a way, Carney has become the living embodiment of decades of Canadian financial prudence—partly through his own actions, and partly for reasons he had nothing to do with. But as his influence grows, so too do the challenges that will ultimately determine his reputation.

When Carney succeeded David Dodge in February 2008, he was relatively young and inexperienced for a central bank governor. He had left Goldman to become a deputy governor at the central bank in 2003, and moved to the Department of Finance a year later. He grasped politics better than some of his colleagues, and understood how the public would react to policy. “He had a well-informed view that wasn’t simply the product of advanced courses in econometrics,” says Karl Littler, who served as an adviser to former prime minister Paul Martin.

His appointment to head the Bank of Canada, however, was something of a surprise since Paul Jenkins, Dodge’s senior deputy governor since 2003, was a strong contender. Carney had also become known for being blunt and impatient with those who couldn’t immediately understand concepts. “A few people there had found him somewhat difficult to work with,” says Rotman professor Paul Masson, who served as a special adviser to the central bank between 2007 and 2008. But while an e-mail sent by the U.S. Embassy in Ottawa to the Federal Reserve at the time of his appointment (unearthed by WikiLeaks) noted Carney had been described as “arrogant” in the press, it countered, “we have found Carney to be not only approachable, but also extremely competent and effective at public outreach.”

He’s put to rest concerns about his youth and demeanour. When the financial crisis hit in 2008, he provided unprecedented liquidity to the banks and cut interest rates to the lowest levels in Canadian history. “His actions contributed materially to helping the financial system through its difficult time,” says Craig Alexander, chief economist at TD Bank Financial Group.

When it comes to forecasting, the central bank’s record under Carney hasn’t been any better or worse than the private sector. Carney’s growth projections in early 2009 were more optimistic than most, which raised questions during a meeting of the House of Commons standing committee on finance. Carney retorted, “We don’t do optimism. We don’t do pessimism. We do realism at the Bank of Canada.” The projections proved too bullish, however, and the central bank revised its estimates downward. It has also pushed back its timeline for raising rates. Still, the past few years have been difficult for forecasters, and markets look to the Bank of Canada for an indication of where interest rates are headed, not specific GDP growth estimates. On that front, Carney has delivered.

Looking back at his performance, though, it’s hard not to wonder if any central bank governor would have acted differently. It’s impossible to say definitively, of course. Glen Hodgson, chief economist at the Conference Board of Canada, points out there is no comparison to what’s happened recently. “What you saw was a collective response of the senior management team at the bank to really exceptional circumstances,” he says, adding that Carney’s private-sector experience and knowledge of financial markets did give him an edge past governors wouldn’t have had. But in talking to economists about Carney, the phrase that often comes up is that “he did everything he was supposed to do.” His actions are simply what we expect from central bankers, partly because he’s the latest in a competent line.

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