UK chancellor, George Osborne, has announced that Mark Carney, who has been governor of the Bank of Canada for the past five years, will move over to the Bank of England (BoE) this summer to succeed Sir Mervyn King whose term of office is due to end on 30 June 2013.
Announcing the appointment to Members of Parliament (MPs) in the House of Commons, Osborne said that Carney would bring “a fresh perspective” to the role of BoE governor and paid tribute to his strong leadership.
“Mark Carney is the outstanding candidate to be governor of the BoE and help steer Britain through these difficult economic times,” said the chancellor.
“He is quite simply the best, most experienced and most qualified person in the world to do the job. He has done a brilliant job for the Canadian economy as its central bank governor, avoiding big bail outs and securing growth.”
Osborne added that Carney will take on the post for a period of five years through to 2018, rather than the normal eight-year term.
The choice was unexpected, with the BoE’s current deputy, Paul Tucker, widely regarded as the front runner to succeed King and other likely candidates including Adair Turner, former chairman of the Financial Services Authority (FSA) and Sir John Vickers, former head of the Office of Fair Trading (OFT). The latter is also author of the Vickers report, which instigated the ring-fencing of UK banks from the investment banking operations.
Speaking to the media back in August, Carney had appeared to rule himself out as a contender for the BoE governorship, commenting that he was happy and focused on his current role in Canada. He will now apply for British citizenship and will also continue in his role as chairman of the international Financial Stability Board (FSB).
Carney will oversee the implementation of the new post-crash regulatory structure in the UK, which begins in 2013 with the abolition of the Financial Services Authority (FSA), whose famous ‘light touch’ regulation did little to protect the country from the build-up to and consequences of the financial crisis.
Under the new UK regulatory regime, the BoE will have greater powers with the creation of the Financial Poliucy Committee (FPC) and a new Prudential Regulatiuon Authority (PRA), which look out for market-wide threats and unsustainable bubbles, coming under its auspices. A new Financial Conduct Authority (FCA) is also being set up to protect consumers and retail banking.
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