Canadian boss for Bank of England: City stunned as Osborne snubs tainted British candidates to hire first ever foreign governor
Governor of the Bank of Canada to cross the Atlantic to take charge at Threadneedle Street next yearChancellor George Osborne makes surprise announcement in a statement to the Commons
Accepting the job, the 47-year-old says he is 'honoured' to take over at a 'critical time' for the British economyTotal pay and perks package expected to be 624,000-a-year
23:38 GMT, 26 November 2012
George Osborne yesterday named a Canadian as the next governor of the Bank of England – the first overseas appointment to Britain’s most prestigious financial post.
In a move which stunned City observers, Mark Carney, who runs the Bank of Canada and once worked for Goldman Sachs, will take over from Sir Mervyn King at the end of next June. No foreigner has headed the Bank since its inception in 1694.
However, Mr Carney has strong links with the UK, including a British wife, and plans to apply for British citizenship.
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Canadian Mark Carney was the surprise choice to be the new Governor of the Bank of England, switching from doing the same job in Canada
In a Commons statement, Chancellor George Osborne said Mr Carney was the 'perfect candidate' to take charge of the Bank of England
THE RISE AND RISE OF THE 'PERFECT CANDIDATE'
Even publicly ruling himself out of the race was not enough to stop Mark Carney’s path to Threadneedle Street.
After insisting he was not interested in applying for the job, it is understood the 47-year-old had a rethink.
After a few discreet chats with George Osborne and Treasury permanent secretary Nick Macpherson, he threw his hat into the ring.
The Chancellor in particlaur was convinced he had the right CV for the job. Born in Fort Smith, Northwest Territories, Canada in 1965, he studied economics at Harvard and Oxford University before embarking on a 13-year career in investment banking with Goldman Sachs.
He worked in offices around the world, including Tokyo, New York, Toronto and London.
Married to British economist Diana Fox Carney, he joined the Bank of Canada as deputy governor in 2003, before landing the top job in 2008.
He is also Chairman of the Financial Stability Board, a global watchdog which monitors the global financial system, which means he already has a good working relationship with Mr Osborne.
He is a member of the Board of Directors of the Bank for International Settlements, a member of the Group of Thirty, and of the Foundation Board of the World Economic Forum.
Mr Osborne told MPs the combination of running a central bank, international regulation and experience in the private sector made Mr Carney the ‘perfect candidate to take charge of the Bank as it takes on these vital new responsibilities’.
‘He will bring strong leadership and a fresh new perspective,’ the Chancellor addedThe decision is a humiliation for
leading British candidates for the post including Bank deputy governor
Paul Tucker and Lord Turner, who chairs the Financial Services
Authority.Mr Osborne appears determined to
inject fresh blood into an institution which is being handed sweeping
powers to police the financial system and the economy. Many City
luminaries have had their careers tainted by the financial crisis and
its aftermath.The Chancellor described Mr Carney,
47, as ‘the outstanding central banker of his generation with
unparalleled expertise in financial regulation’. He said: ‘We needed the
best – and in Mark Carney we’ve got it.’
Mr Carney, who has been praised for
his handling of the Canadian economy and banking system, said he was
honoured and added: ‘I am going to where the challenge is greatest.’
Peter Dixon, an economist at Commerzbank, said the appointment was a huge surprise.
‘That was the one guy I didn’t have in
the running, and it’s a slap in the face for the likes of Paul Tucker
and all those other guys who were hoping to step up to the plate,’ he
Labour MP Barry Sheerman said it was surprising ‘the leading banking nation on earth could not find a British candidate’.
Business leaders welcomed the decision.
Simon Walker, of the Institute of
Directors, said: ‘The UK operates in global markets, and faces global
challenges, so it’s encouraging to see that the search for the new
governor has extended to the global talent pool.
'Britain benefits when
we open our doors to the brightest and best the world has to offer.’
Katja Hall, of the CBI, said: ‘His strong track record as the Canadian
central bank governor and extensive experience in international
financial regulation mean that he is well positioned to guide Britain
through challenging economic times.’
Mr Carney will earn 480,000 a year
plus pension contributions of 144,000 – a total of 624,000 a year.
Treasury officials said his relocation package was being negotiated.
Mr Carney, whose British wife Diana is
an economist, spent 13 years at Goldman Sachs in London, Tokyo, New
York and Toronto before joining the Bank of Canada in 2003 and becoming
governor in 2008. He has studied at Oxford University.
David Cameron said he was delighted
with the appointment, adding: ‘He takes up the role at an important
time, as we put the Bank of England back at the heart of financial
regulation, so that we do not repeat the mistakes of the past.
‘His distinguished record on economic
policy, the high regard of his international peers and the leadership he
has shown on the global economic crisis make him the exceptional person
for this job. I very much look forward to working with him from next
Speaking at a press conference in
Ottawa yesterday, Mr Carney said: ‘I am honoured to accept this
important and demanding role.
'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.’
The fact his appointment did not
leak was seen as a victory within the Treasury following the disastrous
handling of the Budget in March.
Ed Balls welcomed the appointment of
Mr Carney, who is internationally recognised as chairman of the
Financial Stability Board, the group of central bankers and top
government officials responsible for banks globally.
The Bank is taking
on extra responsibilities for policing banks and financial regulation.
It already sets interest rates with the aim of controlling inflation.
VIDEO: The Chancellor addressed the House of Commons…
Sir Mervyn King, who will stand down as Governor in June next year, said Mr Carney represents 'a new generation of leadership'
Runners and riders: Deputy governor of the Bank of England Paul Tucker (left) has been considered the favourite for the job, ahead of Lord Turner, chairman of the Financial Services Authority Lord Turner (centre) and former Cabinet Secretary Lord O'Donnell (right)
THE BIGGEST EVER BANK JOB
The 50 note, issued in 1994, which featured the first Bank of England governor Sir John Houlbon
The Bank of England was founded in 1694 and is sometimes known as the 'Old Lady' of Threadneedle StreetThe
first Governor of the Bank of England was Sir John Houblon, who was
appointed in July 1694 and continued in office until 1697. He features
on the current 50 note, which also includes a picture of Sir John’s
house in Threadneedle Street, where the Bank now stands.Every bank
note bears the promise ‘I promise to pay the bearer on demand’ because
you used to be able to take a note into the bank and exchange it for
gold. But this is no longer possibleThe Bank was nationalised in 1946It is responsible for managing inflation, and now has a target of two per cent. In August 1975 inflation topped 27 per centIn 1997 the New Labour government granted the Bank independence, and is solely responsible for setting interest ratesThe Bank of England is responsible for around 2 billion banknotes in circulation at any one time, worth about 38bn
A jolly hockey sticks English wife
/11/26/article-2238713-1638EE13000005DC-867_634x531.jpg” width=”634″ height=”531″ alt=”Mr Carney is pictured with this wife Diana. Chancellor George Osborne said he was the outstanding candidate for the job” class=”blkBorder” />
Mr Carney is pictured with this wife Diana. Chancellor George Osborne said he was the outstanding candidate for the job
He had moved there for a masters in economics after studying at Harvard.
At Harvard, the athletics spokesman described him as a ‘wow’ goalkeeper who stopped ‘every shot he ever faced’.
He played in only one varsity match but, true to form, stopped all five shots.
The couple’s love of sports brought them together from very different backgrounds.
Mr Carney, 47, was raised in a Roman Catholic family in Fort Smith, Northwest Territories, where his mother made fur-lined parkas to keep her three sons warm in the freezing temperatures of a town which describes itself as the gateway to Wood Buffalo National Park.
His father was principal of the local high school and, in an interview last year, Mr Carney said: ‘Our house was filled with books and there was lots of discussion on the issues of the day.’
The family moved to Edmonton where as a young boy he recalled ‘shovelling’ driveways and delivering the local paper to earn spending money.
Mark Carney has been appointed as the next governor of the Bank of England in Threadneedle Street, London
He said: ‘You pick up your values from your family first, but also from your community, and Edmonton’s definitely the formative community for me.
‘I would like to think I have the right values of integrity, hard work, prudence, good judgment and perseverance – all those Edmonton characteristics.’
His future wife had been brought up in privileged surroundings in Cheltenham.
Indeed her sister, Lady Tania, lives in the sprawling Cornbury Park estate, which neighbours Blenheim Palace, with her shipping heir husband Viscount Rotherwick.
Lady Rotherwick has graced the pages of Tatler and made headlines last year after a spat with the Duke of Marlborough over an annual concert she holds in her grounds.
DISAPPOINTMENT FOR BOOKIES' FAVOURITE PAUL TUCKER
The appointment of Mark Carney will come as a bitter blow to Paul Tucker, who was the bookmakers’ favourite for the job.
He joined the Bank of England in 1980 and had risen to become Sir Mervyn King’s deputy governor.
But he was dragged into the Barclays rate-rigging scandal after the bank’s ex-boss Bob Diamond revealed a contentious phone call with him.
Mr Tucker fiercely denied he had sanctioned Barclays’ efforts to manipulate its borrowing costs when he was hauled before MPs. He survived without slipping up and Mr Diamond refused to blame him.
Jeremy Cook, chief economist at foreign exchange firm World First, said: ‘I would think that the stench of Libor investigations and his involvement with that rather sordid episode in the banking world’s history must have damaged his chances.’
It is thought Mr Tucker might move to the private sector but senior Treasury sources said he could still succeed Mr Carney as governor in 2018.
Miss Fox, as she continues to call herself, was a first-class graduate in politics, philosophy and economics and won a scholarship to the University of Pennsylvania to study international relations. She gained a science degree in agricultural economics when she returned to Oxford.
She married Mr Carney in Bullingdon, Oxfordshire, in July 1994.
Her husband took a job with Goldman Sachs and the young couple set up home in fashionable Hampstead, North London.
They moved to Ottawa in 2003, where they now have an 800,000 home and four daughters, all under the age of ten.
Miss Fox, 46, refers to them endearingly as the ‘young Foxes’. Before following her rising star husband Mark back to Canada, she worked for the Department for International Development, the Overseas Development Institute and as a consultant for aid charities. Once in Canada, she continued to explore her long held interest in green issues.
She recently wrote on an ecologist website: ‘About 15 years ago, I made a conscience decision to switch to eco products whenever possible.
‘Since then I have actively sought out organic, natural and resource-saving products (and tried to limit my overall consumption).
‘I do not claim to be an eco-purist and my journey towards natural products has not always been smooth. But I do think I have made progress.’ Last year she took on a senior role, as vice president of research, in the think-tank Canada 2020 – whose mission statement is create ‘the Canada we want in 2020’ by ‘informing and influencing debate’.
Giving an insight into her life in the Canadian capital, Miss Fox said: ‘I am originally from the UK but am now based in Ottawa, Canada. I am a multi-tasking mother-of-four: I combine working on federal government policy issues with raising my children and running a busy household.’
And in an acute observation of the realities of everyday life for a busy mother she wrote on her Twitter feed: ‘57 per cent of Canadian companies are “lifestyle”: they make decisions based on getting the kids to hockey.’
Her hobbies include modern dance, cross-country skiing, cycling and flowers.
Despite his role as Governor of the Bank of Canada, Mr Carney has still found time to coach his daughter’s football team.