Bank of England assesses Canadian for the top job

Current governor of Canada's central bank approached "informally"

Dr Mark Carney in September last year
Mark Carney in September last year. Credit: Getty

The Financial Times is reporting that the governor of Canada's central bank, Mark Carney, has been informally approached to take over from Mervyn King in 2013.

Patrick Jenkins, Chris Giles and Brooke Masters write:

One of the world’s most respected central bankers, Mr Carney, 47, now heads the Financial Stability Board, which oversees global financial regulation. He was approached recently by a member of the BoE’s court, the largely non-executive body that oversees its activities, according to three people involved in the process.

The Treasury is denying the news, and Carney declined to comment.

The favourite to take over from King remains one of his two deputies at the Bank, Paul Tucker, but the widely held opinion that it mishandled the financial crisis means that there is growing pressure to bring in an outsider for the first time in thirty years. It is faintly ironic that the Bank, which oversees a sector in which mobility of top talent is treated as an unquestionable truth, itself recruits from such a narrow pool of candidates, but that is one of the constraints which it is subject to in its dual role as state entity and financial actor.

The FT notes the importance of the fact that, while Carney is a foreigner, he has strong links with Britain:

Mr Carney has a British wife, studied at Oxford university, and worked at Goldman Sachs in London early in his career. “As a Canadian national he is a subject of the Queen,” said one supporter. “That is important.”

The change would be one of a number of shake-ups at the bank next year, with the biggest being its absorption of the role of bank safety regulation from the Financial Services Authority, which is to be disbanded.

As we reported last month, following the publication of the Treasury's report into its handling of the financial crisis, all eyes are now on the Bank, which is the only major financial player not to have examined its reaction. At the time, Mervyn King admitted that the Bank had erred, but claimed that the subsequent reputational damage was due to politicians. Whoever the new governor is, it is likely he or she will show slightly more contrition.