Next Governor of the Bank of England, Mark Carney, defends £800,000-a-year pay and perks package

Relaxed but no revolutionary, Mark Carney keeps banking reform on the table

The next Governor of the Bank of England, Mark Carney, has been forced to defend his £800,000-a-year deal under questioning from MPs.

Mr Carney’s base salary of £480,000 is more than that of his US and European equivalents combined – and he will also receive a £250,000 housing allowance on top.

“I was offered these terms and I accepted them,” he said, pointing out that allowing for the fact that he will not receive a Bank of England pension means that his package is “equivalent” to that of his predecessor Sir Mervyn King.

Justifying the housing allowance, Mr Carney pointed out that London was a far more costly place to live than his present home city of Ottawa. “I am moving from one of the cheapest capitals in the world to one of the most expensive,” he said.

Mr Carney used his appearance before the Treasury Select Committee to call for a public debate over whether the central bank’s existing inflation should be overhauled, in order to drag the ailing UK economy out of its two-year stagnation.

In his first public appearance since he was named by George Osborne as Sir Mervyn’s successor, Mr Carney said he could see the advantage in discussing reforms of the central bank’s 2 per cent annual inflation mandate. “I think there is merit in debating the framework and coming to a relatively quick conclusion,” he said.

However, Mr Carney, who is presently the governor of the Canadian central bank, distanced himself from the speech he made in Toronto two months ago where he seemed to suggest that central banks could be given a growth objective known as an NGDP target.

“If there’s a debate it [NGDP targeting] wouldn’t be my contribution,” he said, dashing the hopes of those who wanted him to advocate a radical shake-up at the Bank.

It emerged during the hearing that the reform Mr Carney has in mind is a more relaxed version of the existing inflation targeting regime, whereby the central bank would commit to keep interest rates low until growth returns strongly, or until unemployment falls below a certain threshold.

Mr Carney added, however, that there was a “high bar” to be cleared by any reform proposal because the existing inflation targeting framework, in place since 1997, had performed well.

The Chancellor welcomed Mr Carney’s Toronto NGDP speech in December, but, along with the incoming Governor, the Treasury appears to have cooled on the idea of radical alterations to the Bank’s mandate in recent weeks, despite the fact the economy contracted again in the final three months of last year.

Despite the taut early exchanges over his pay deal, Mr Carney, who worked for 13 years at the US investment bank Goldman Sachs, soon relaxed and appeared to charm MPs on the committee. “All excellent questions,” he responded to Conservative MP Andrea Leadsom, who was probing his views on making customer bank accounts fully portable.

The session, which lasted three hours 40 minutes, left many members of the committee visibly flagging – their numbers had been whittled down from 11 to 9 by the end. But Mr Carney was still delivering detailed and fluent answers on details of bank accountancy right up until the point when chairman Andrew Tyrie called a halt to proceedings.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
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 General

Austen Lloyd: Commercial Property Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - A great new opportunity with real pot...

Austen Lloyd: Senior Private Client Solicitor - Exeter

Excellent Salary: Austen Lloyd: EXETER - An outstanding senior opportunity for...

Sauce Recruitment: Retail Planning Manager - Home Entertainment UK

salary equal to £40K pro-rata: Sauce Recruitment: Are you available to start a...

Ashdown Group: Front-End Developer - London - up to £40,000

£35000 - £40000 per annum: Ashdown Group: Creative Front-End Developer - Claph...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower