Bank of Canada Governor Mark Carney will take over the
reins as Governor of the Bank of England next year.
Britain named Canadian central bank chief Mark Carney on
Monday as the next governor of the Bank of England, springing
the surprise choice of a foreigner to help steer the world's
sixth-largest economy out of stagnation.
A former Goldman Sachs investment banker who as central bank
head guided the Canadian economy through the global economic
crisis, Carney will succeed Mervyn King who retires next
"He is quite simply the best, most experienced and most
qualified person in the world to be the next Governor of the
Bank of England," finance minister George Osborne told
parliament in announcing the appointment.
During the crisis, Carney helped to make Canada's recession
one of the shallowest of the world's richest nations. No
Canadian bank needed government help, and the country
recovered all the jobs it lost in the downturn relatively
By contrast, Britain had to bail out some of its biggest
banks and the economy is struggling to achieve growth four
years after the crisis broke.
Carney also heads the Financial Stability Board (FSB), a
Basel-based body that sets global banking rules.
"This will be a very important transitional phase for both
the institution itself, the Bank of England, but above all
for the British economy," Carney told a news conference in
From next year the BoE will take charge of British financial
regulation, almost doubling its size. This boosted the case
for a governor with strong management skills and financial
market experience, rather than someone in King's academic
Carney said he would help the British economy as it tries to
reduce its reliance on financial services.
"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 - which is underway - ...
is seen through over the course of the next five years."
Carney's past as a Goldman Sachs investment banker has been a
double-edged sword, as he fought to prove his loyalties lie
with ordinary citizens, not his high-flying banker
ex-colleagues. He clashed memorably last year with JPMorgan
Chase & Co Chief Executive Jamie Dimon in Washington as
the banker argued against new regulations for the financial
Until now, Carney had strongly played down the possibility of
heading the British central bank. "(It's a) surprise, huge
surprise," said Peter Dixon, an economist with Commerzbank.
"That was the one guy I didn't have in the running."
The athletic-looking Carney will now become Britain's most
powerful unelected public figure, responsible for setting
interest rates and looking after the banking sector.
Britain's government had been widely expected to pick Deputy
Governor Paul Tucker as the new chief, ignoring calls for a
more radical option to shake up the central bank.
"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," Osborne said.
Pressure on Carney will be high and financiers in the City of
London would expect him to act quickly to jolt Britain's $2.5
trillion economy out of stagnation, prevent bubbles and keep
the financial sector safe.
Carney is not a British national, although Osborne said he
would apply for UK citizenship. He studied at Oxford
Carney will serve at the Bank of Canada until May, and then
starts at the Bank of England in July. He will serve a
five-year term, rather than the eight-year term that had been
expected for the next BoE governor.
"Perhaps one factor in Carney's favour is the Canadian banks
were very highly regulated before the credit crisis and
accordingly the Canadian banking system is in good shape,"
said Philip Shaw of Investec.
"One thing we would expect is the new governor sets about
delegating responsibility very quickly, given the enormity of
the tasks that the Bank of England is taking on."
Other figures earlier named as possible successors had
included Financial Services Authority chairman Adair Turner,
John Vickers, author of a government report on bank reform,
and Terence Burns, a former top finance ministry civil