26 Nov 2012

Mark Carney becomes new Bank of England governor

Mark Carney, the current governor of the Bank of Canada, is announced as the surprise replacement for the governor of the Bank of England, Sir Mervyn King.

Chancellor George Osborne announced the appointment in the Commons on Monday after a two-month search for Sir Mervyn King‘s successor.

Mr Osborne said Mr Carney has “got what it takes” and described him as the “outstanding central banker of his generation”, emphasising Mr Carney’s role in protecting Canada from recent years of global economic instability. He will become the first non-British governor of the Bank of England in its 318-year history.

“During his five years as the Canadian bank governor Canada is acknowledged to have weathered the economic storm better than any other major western economy,” Mr Osborne said.

The appointment was welcomed by Shadow Chancellor Ed Balls, who said his experience will be “invaluable”. However, Mr Balls raised concerns that the job, with new regulatory powers being attached, is “too big a job for one person”.

Mr Carney will take over the role at a time of change for the bank. As well as inspiring confidence in the markets, it will also involve leading the bank as it becomes the regulatory watchdog over the City.

He told a press conference in Ottawa that it had been difficult to accept the job, but he thought it “the right decision”. He had previously dismissed rumours that he would take up the role.

He said: “This is a critical time for the British, European and global economies; a decisive period for reform of the global financial system including its leading financial centre, the City of London; and a crucial point in the Bank of England’s history as it accepts vital new responsibilities.”

Mr Carney will take over when Sir Mervyn steps down on 30 June 2013. He has indicated that he intends to serve for five years.

Why Carney?

The chancellor praised Mr Carney for his role in protecting Canada from the financial instability that has plagued the majority of major economies around the world.

“He has done a brilliant job for the Canadian economy as its central bank governor, avoiding big bailouts and securing growth,” he said.

He also pointed out that Carney is the current chair of the Financial Stability Board, the international body “charged with strengthening global financial regulation after the financial crisis”.

Who is he?

Mr Carney has been the governor of the Bank of Canada since February 2008 and previously had a 13-year career with Goldman Sachs in its London, Tokyo, New York and Toronto offices. He was educated at Harvard, before doing a masters and doctorate in economics at Oxford University.

For anyone concerned about a non-Brit taking the most senior non-elected role in the UK, the government was keen to point out Mr Carney’s British credentials.

“Mark Carney is not a British citizen but he is a subject of the Queen,” Mr Osborne said. “His wife is British, his four children have dual British citizenship and he has lived, worked and studied in Britain for a decade.”

Though it is not a prerequisite of securing the job, Mr Osborne said that Mr Carney would be applying for British citizenship. His wife is British and his children hold dual British and Canadian nationality.

Mr Carney has asked that he appear before the Treasury select committee to answer questions on the UK economy prior to starting in his new role – something that Mr Osborne said would be a first for an incoming governor of the bank.