Canada's Carney named as Bank of England chief

Mon Nov 26, 2012 5:20pm EST
 
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By David Milliken and Randall Palmer

LONDON/OTTAWA (Reuters) - Britain named Canadian central bank chief Mark Carney on Monday to head the Bank of England, springing the surprise choice of a foreigner to push reform of its troubled financial system.

A former Goldman Sachs investment banker who at the Bank of Canada guided the Canadian economy through the global economic crisis, Carney will succeed Mervyn King who retires in July.

Carney, who already plays a leading role in setting global banking rules, defended his departure from Canada and signaled that bigger problems awaited him in London.

"I'm going to where the challenges are greatest," he told an Ottawa news conference, stressing the need to "rebalance" the economy which has relied heavily on a financial services sector hit by huge losses and scandals.

"It's very important for the global economy that the UK does well, that it succeeds in this rebalancing of their economy, that the reform of the British financial system is completed," he said.

Carney will become the first non-British head of the central bank in its 300-year history, beating hot favorite BoE deputy governor Paul Tucker to the post, which will pay a salary of 624,000 pounds ($1 million). The Bank of Canada does not disclose Carney's exact salary but says he is paid in a range equivalent to US$436,200-$513,000.

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 rapidly.

By contrast, Britain had to bail out Royal Bank of Scotland and Lloyds Banking Group, and the world's sixth-largest economy is still struggling to achieve growth four years after the crisis broke.   Continued...

 
Mark Carney, the governor of The Bank of Canada, speaks to reporters at a news conference in Ottawa in this April 18, 2012 file photograph. REUTERSPatrick Doyle/Files