Shock for Paul Tucker as Mark Carney is made Bank Governor

Nov 26, 2012

Canadian bank chief is given Mervyn King’s job, to the surprise of City watchers and bookies

PAUL TUCKER, deputy governor of the Bank of England, must be the most disappointed man in Britain this afternoon after he missed out on the Bank's top job, despite being tipped for the position by everyone from politicians, to bookies, to journalists.

In a move described as a "big, big shock", Chancellor George Osborne told the Commons at 3.30pm today that Mark Carney, the governor of Canada's central bank, will replace Sir Mervyn King at the helm of the Bank when he leaves next summer.

Osborne called 47-year-old Carney "the pre-eminent central banker of his generation", though until today's announcement it was believed Carney had ruled out taking the job in London.

The speculation that 54-year old Tucker would get King's job reached a crescendo today despite the fact his chances were almost undone earlier this year when emails emerged between himself and former Barclays boss Bob Diamond appearing to sanction the bank's efforts to manipulate its borrowing costs downwards. Tucker was questioned by MPs over the matter, but "re-emerged as a frontrunner", The Guardian said.

Tucker had already won the support of the Financial Times which, in an unprecedented move, gave him its blessing in an editorial headed 'The Right Man for the Old Lady' published on 15 November. The paper insisted that none of his rivals could match his all-round experience.

Those rivals included Sharon Bowles, the high-profile Liberal Democrat Euro-MP, economist Sir John Vickers, and Lord (Adair) Turner, chairman of the FSA.

It was believed that Carney and Glenn Stevens, the head of Australia's central bank, had both turned down the job.

Toronto's Globe and Mail said the announcement was a shock, both because Carney had "dismissed rumours" that he was in the running for the job and because "it's so rare for a government to appoint a non-native to lead its central bank".

Carney, who studied economics at Harvard and Nuffield College, Oxford, before spending 13 years at Goldman Sachs, said: "I'm not without ties to the UK." His wife Diana, also an economist, is a dual British-Canadian citizen and he has "a lot of friends" in London. He told the Globe and Mail: "I see this as a challenge. I'm going to where the challenges are greatest."

The Guardian's economics editor Larry Elliott described the appointment as a "big, big shock". He wrote: "The City fully expected the Chancellor to pick Paul Tucker, the current deputy governor, and this will be a big blow to him.

"As governor of the Bank of Canada, Carney is thought to have had a 'good crisis'. Canadian banks weathered the storm better than most, seen in part due to the regulation of the Bank of Canada."

Carney’s salary at the Bank has yet not been disclosed. Mervyn King was understood to be on a basic £305,000, frozen since 2010.

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