Mark Carney: The outsider wins again

The Bank's new Governor, Canadian Mark Carney, is a dark horse who is needed to bring in a new beginning, says Russell Lynch

A little-known banker in Canada called Paul Jenkins will know how the Bank of England's deputy Governor Paul Tucker is feeling right now. In 2007, the veteran of 35 years was the hot favourite to claim the Bank of Canada's top job but was pipped to the post by Mark Carney, who became the youngest central bank governor among the leading G7 nations.

Scroll forward five years and Mr Carney has done it again, overhauling a massive favourite in Mr Tucker, a Bank of England lifer, to plant the Maple Leaf flag atop the Old Lady of Threadneedle Street.

He will become the country's most powerful unelected official next July, when he succeeds Sir Mervyn King. The appointment stunned the City, and also proves the adage of never believing a story until it has been officially denied.

More than six months ago the Bank of Canada said it was "not accurate" that Mr Carney was approached as a potential candidate. The Canadian also denied it personally in an interview three months ago. Now he has leapfrogged a roster of rivals including Mr Tucker, Financial Services Authority chairman Adair, Lord Turner, and former BoE chief economist Sir John Vickers to claim the top job.

For Mr Tucker the blow is particularly savage: after a summer wobble induced by his mateyness with ousted Barclays chief executive Bob Diamond, he was seen universally as the overwhelming favourite for the job. Despite Sir Mervyn's comments yesterday that he "has much more to contribute in the years ahead", after three decades, he will surely feel that his future lies outside the bank.

So who are the City getting in Mr Carney? On paper he's an outsider, although he will seek British citizenship, but a look on his CV shows that the Square Mile is getting one of their own. A 47-year-old former Goldman Sachs veteran of 13 years, doing stints in New York, London, Tokyo and Toronto, he will have no trouble speaking to the bankers in a language they understand. After 10 years of Sir Mervyn and "the MA way", in reference to the monetary analysis unit which held sway as the central bank took on a decidedly academic bent, Chancellor George Osborne is drawing a stark line in the sand and setting a new course for the Bank of England.

But Mr Carney also ticks the boxes on the economics front, with degrees in economics from Harvard as well as a doctorate from Oxford in 1995. He knows his stuff.

Mr Carney also has a reputation as a policy hawk after taking some criticism for failing to cut interest rates swiftly in the first half of 2009. ING Bank economist Rob Carnell said: "Canada has emerged from the global financial crisis in better shape than any other G7 country, with lower public debt, and a stronger financial system. Whether this owes to great foresight or skilful policies is a moot point, but it leaves Mr Carney's reputation looking good.

"It is also worth pointing out that the BoC remains about the only G7 central bank with a tightening bias... though equally, this stance is more appropriate for Canada's own particular situation and we may find that he is quite different as BoE Governor."

Certainly the appointment continues the Chancellor's love affair with Canada after holding the nation up as the model for his own deficit-cutting strategy two years ago. But Canada's swingeing cuts in the 1990s were only possible due to strong economic growth elsewhere rather than carried out against the backdrop of a global slump. Much tighter controls on its banking system did however mean that Canada dodged the bullets of the subprime debacle.

Here Mr Carney's track record may have helped, particularly with the Bank due to take on reponsibility for bank regulation from next April. Investec's chief economist Philip Shaw said: "The Canadian banking system is widely regarded to be in good shape because of the BoC's approach to bank regulation ahead of the credit crisis."

Crucially Mr Carney can also use his status as an outsider to press on with the job of changing the culture of the Bank of England. A trio of independent reports commissioned by the Bank recently highlighted a culture of deference, where staff were reluctant to pose views unpopular with the Bank's top staff because of the potential damage to their careers. Mr Tucker was never realistically going to lead a cultural revolution.

IHS Global Insight's Howard Archer said: "The appointment... likely reflects the view that it is a good time to have a complete new broom... For all his strong qualities and experience, there was some concern that Tucker had spent all of his career within the Bank of England, so may find this harder to achieve."

After a stunning coup, and with a bulging in tray, the Canadian will have plenty of sweeping to do.

That Goldman touch: ultimate advantage

For a certain stratum of banker, it's got to be Goldman.

Whatever role Wall Street's vampire squid played in the global banking crisis it has failed to make executives who have served their dues there, including Mark Carney, the next Bank of England Governor, any less employable.

If recruiters want someone with strong operational experience, they hunt out CVs that feature early years spent at the management consultancy McKinsey. For all-out financial clout, they go for Goldman.

The bank's former chief Henry Paulson, George Bush's last Treasury secretary, was the architect of Wall Street's bailout, while Robert Rubin, who served under Bill Clinton, had a similar apprenticeship before chairing Citigroup. The list within Washington goes on.

Closer to home, Paul, now Lord, Deighton, was rewarded for his stewardship of London's Olympic organising committee with a role as a Treasury minister. Gavyn Davies, the former BBC chairman and another alumnus, tweeted Mr Carney's appointment was "a big surprise, but a pleasant one. It is a bold appointment."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
News
Andy Davidhazy at the beginning (left) and end (right) of his hike
video
News
Taylor Swift is applying to trademark song lyrics from 1989
people
Voices
The popularity of TV shows such as The Liver Birds encouraged Liverpudlians to exaggerate their Scouse accent
voicesWe exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
Life and Style
Parker says: 'I once had a taster use the phrase 'smells like the sex glands of a lemming'. Who in the world can relate to that?'
food + drinkRobert Parker's 100-point scale is a benchmark of achievement for wine-makers everywhere
News
i100
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

How to make your own Easter egg

Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

Bill Granger's twist on Easter Sunday lunch

Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
Joe Marler: 'It's the way I think the game should be played'

Joe Marler: 'It's the way I think the game should be played'

The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

Cricket World Cup 2015

Has the success of the tournament spelt the end for Test matches?
The Last Word: Justin Gatlin knows the price of everything, the value of nothing

Michael Calvin's Last Word

Justin Gatlin knows the price of everything, the value of nothing