George Osborne gets his man: Mark Carney named as new Bank of England Governor - UK Politics - UK - The Independent

George Osborne gets his man: Mark Carney named as new Bank of England Governor

Canadian Mark Carney is first foreign Governor of the Bank of England in 318 years – but can he ride to the economy’s rescue?

George Osborne has stunned the City by announcing that Mark Carney, the Canadian central banker, will replace Sir Mervyn King as the next Governor of the Bank of England.

Mr Carney, who had previously ruled himself out of contention for the job, will become the first non-British governor in the Bank’s 318-year history and will fill the most powerful non-elected position in the country.

The Chancellor announced that Mr Carney, who spent more than a decade working for the US investment bank Goldman Sachs, will serve a fixed five-year term, rather than the eight years that had been expected. The Bank’s Deputy Governor of the Bank, Paul Tucker, had widely been expected to be named as Sir Mervyn’s successor next month.

“Mark Carney is the outstanding central banker of his generation” the Chancellor told the House of Commons in a statement, adding that Mr Carney would bring the “strong leadership and external experience the Bank needs”.

He said: “Mr Carney is unique amongst the potential candidates in combining long experience of central banking, huge international credibility in economics, deep expertise in financial regulation and a first-hand experience of private sector financial institutions”.

The incoming Governor, as well as overseeing the Monetary Policy Committee, which sets interest rates and takes decisions on money printing, will also chair the Financial Policy Committee, which will be tasked with ensuring financial stability from next year.

Mr Carney told a news conference in Ottowa after the announcement that he was relishing the challenge and that he was “honoured” to accept the appointment. “I am going to where the challenge is greatest” he said.

The news was greeted with shock in the Square Mile, where Mr Tucker was widely seen as the red-hot favourite. “Surprise, huge surprise” said Peter Dixon an economist at Commerzbank “That was the one guy I didn’t have in the running, and it’s a slap in the face for the likes of Tucker.”

Analysts said that the appointment reflected the Chancellor’s admiration of the performance of the Canadian economy through the global downturn of 2008-09 and also the fact that no Canadian banks needed to be bailed out in the crisis. In Britain the authorities were forced to extend an estimated £1trillion to prevent the sector from melting down.

Sir Mervyn welcomed the appointment. ”He represents a new generation of leadership for the Bank of England, and is an outstanding choice to succeed me” he said in a statement. The Labour Party also gave the appointment a warm reception. In the Commons Ed Balls, the shadow chancellor, described Mr Carney as a “good choice, good judgement”.

Mr Carney, 47 is the youngest head of a central bank of any G8 country. After studying economics at Harvard, he took a masters and doctorate at Oxford. He spent thirteen years as an analyst at the US investment bank Goldman Sachs before being appointed deputy governor of the Bank of Canada in 2003. From there he moved to the Canadian finance ministry, where he was a deputy minister, before being appointed to his present position as head of the Central Bank of Canada in 2008. He is credited with helping to pull Canada safely through the global downturn.

Mr Carney is also the chair of the G20’s Financial Stability Board, which was established during the 2008-09 financial emergency to co-ordinate global banking supervision. In that role Mr Carney clashed earlier this year with the Bank of England’s highly-regarded Director for Financial Stability, Andy Haldane, on the question of how large the capital buffers of global banks should be. Mr Carney said last month that he thought that a speech Mr Haldane had given on the subject was “uneven”.

The Chancellor said that Mr Carney, a Canadian citizen, would apply for British citizenship. His wife, Diana, and four daughters already have joint Canadian and British citizenship. Mr Carney is expected to receive a salary of £624,000. This is more than double the remuneration of the outgoing Governor, but the Treasury said last night that the difference was largely accounted for by the fact that Mr Carney will not be enrolled in the Bank’s generous pension scheme.

In a BBC interview in August 2012, after initially being linked with the post, Mr Carney said that he was not interested. But Mr Carney is believed to have been persuaded by the Chancellor in person to apply. The two men have met at various international policy forums including the G20, the G8 and the World Economic Forum in Davos.

Mr Carney was selected by an interview panel that included the Permanent Secretary of the Treasury, Sir Nicholas Macpherson, and the two Second Permanent Secretaries, John Kingman and Tom Scholar. Also on the panel was Sir David Lees, head of the Court of the Bank of England. The panel put forward Mr Carney’s name to the Chancellor, who then consulted the Prime Minister and the Deputy Prime Minister before announcing his decision.

Other candidates believed to have applied for the post included Adair Turner, the Chairman of the Financial Services Authority and Sir John Vickers, who headed last year’s Independent Commission on Banking, and Lord Burns, the UK chair of the Spanish bank Santander.

Charlie Bean, another of Sir Mervyn’s deputies, alongside Mr Tucker, was due to step down at the same time as the Governor next year. The Chancellor announced yesterday that Mr Bean will now remain in his post for a further twelve months to ease Mr Carney’s transition. The Chancellor also said he hoped Mr Tucker would stay on at the Bank, despite missing out on the top job.

In his statement Mr Osborne praised the outgoing Governor, Sir Mervyn, for serving with great distinction through what he called “the most difficult period of economic policy making of the modern age.”

When the Bank takes on the responsibilities of the Financial Services Authority next year it would double in size. Mr Carney said yesterday that he was up to the challenge of managing the transition. “I can play a constructive role…in relaunching this institution with its new responsibilities, contributing to price stability, to financial stability and to ensuring that the rebalancing of the UK economy…is seen through over the course of the next five years” he said.

Suggested Topics
News
John Travolta is a qualified airline captain and employed the pilot with his company, Alto
people'That was the lowest I’d ever felt'
Life and Style
healthIt isn’t greasy. It doesn’t smell. And moreover, it costs nothing
News
peopleThe report and photo dedicated to the actress’s decolletage has, unsurprisingly, provoked anger
Property
Home body: Badger stays safe indoors
property
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn unforgettable anthology of contemporary reportage
News
The programme sees four specialists creating what they believe are three perfect couples, based on scientific matchmaking. The couples will not meet until they walk down the aisle together
tvUK wedding show jilted
Arts and Entertainment
US pop diva Jennifer Lopez sang “Happy Birthday” to Gurbanguly Berdimuhamedow, president of Turkmenistan
musicCorporate gigs become key source of musicians' income
Arts and Entertainment
You've been framed: Henri Matisse's colourful cut-outs at Tate Modern
artWhat makes a smash-hit art show
Arts and Entertainment
While many films were released, few managed to match the success of James Bond blockbuster 'Skyfall'
filmsDaniel Craig believed to be donning skis as 007 for first time
Sport
Mikel Arteta pictured during Borussia Dortmund vs Arsenal
champions league
Voices
Yes supporters gather outside the Usher Hall, which is hosting a Night for Scotland in Edinburgh
voicesBen Judah: Is there a third option for England and Scotland that keeps everyone happy?
Arts and Entertainment
Pulp-fiction lover: Jarvis Cocker
booksJarvis Cocker on Richard Brautigan
Arts and Entertainment
Robin Thicke and Pharell Williams in the video of the song, which has been accused of justifying rape
music...and he had 'almost no part' in writing it
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

Senior QA Engineer - Agile, SCRUM

£35000 - £50000 per annum + benefits: Ashdown Group: Senior QA Engineer (Agil...

Marketing Executive - West Midlands - £28,000

£26000 - £28000 per annum: Ashdown Group: Digital Marketing Executive (SEO, PP...

Retail Business Analyst

£40000 - £50000 Per Annum: Clearwater People Solutions Ltd: Our retail client ...

Senior C++ Developer

£400 - £450 Per Annum possibly more for the right candidate: Clearwater People...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week