Warm welcome and a hot salary for new Bank chief Mark Carney

Nov 27, 2012

But the Canadian needed some serious courting by George Osborne to take on the challenge

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FINANCIAL columnists and investors are united in praise for Chancellor George Osborne's pick of Canadian Mark Carney as the new head of the Bank of England on a £480,000 salary plus a £144,000 annual pension contribution.

The Daily Telegraph's star City writer Jeremy Warner said the move "looks an inspired and eloquent choice which marks a clean break with the failings of the past. The Chancellor has managed to transform an appointment which threatened to be a big, somewhat underwhelming, yawn into a major and very welcome surprise."

Allister Heath, CityAM editor and normally a trenchant critic of Osborne, said that "to his great surprise" the Chancellor has pulled off a coup: "[Carney] is a tough reformer, not a vandal. He is no soft touch ­ but neither does he want to turn Canary Wharf into a ghost town."

Writing in The Financial Times, Martin Wolf also commended the choice but warned that the British-educated Canadian faced many challenges. In particular "the BoE's performance during the crisis has revealed serious failings. Examination of performance before the crisis might reveal still more important failings."

The Guardian quotes Andrew Tyrie, the MP in charge of the important House of Commons Treasury Select Committee, praising the Osborne's choice. "Dr Carney is an experienced and talented appointee with deep public and private sector experience. The Chancellor's statement has been welcomed on all sides of the House."

It turns out 47-year-old Carney needed some serious courting by the Chancellor to be persuaded to cross the Atlantic. He originally turned the offer down but, as the FT reports, such was Osborne's desire to have an outsider with a strong reputation as a manager as well as a policy maker that "for each problem Carney raised, Osborne found a solution".

The main stumbling block appears to have been a list of personal issues.

Carney was unimpressed by the salary - Mervyn King was on £305,000 - and his wife and four daughters were happy in Canada. He also didn't fancy the prospect of an eight-year commitment to the Bank.

Osborne hiked the salary to £480,000, added a 30 per cent pension contribution, and got the length of the contract reduced from eight to five years.

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Some excellent points. Mr. Carney has the potential to be the new ruler of England but will he do it? At present the oligarch of banks who decide on the best places to lend money call the shots. They control the money supply whilst charging interest on it and generally sucking the life out of the nation. If Mr. Carney can trim them down and channel funds out of morgages and into industry as he has in Canada it will be great. It will leave the politicians free to get on with their sacred mission of attracting voters, scoring points off each other and looking busy which they are good at..