New governor takes over at the Bank of England

A new governor has taken over the helm of the Bank of England as former governor Sir Mervyn King stepped down to retire.

Mark Carney has joined the bank from the Bank of Canada and is now officially installed as governor.

The £874,000 a year job makes him one of Britain’s best-paid public servants.

Chancellor George Osborne, who had the final say over who took over at the bank, praised Carney as “the outstanding central banker of his generation”.

He has tasked him to sail Britain out of the financial choppy seas in to the calmer waters of prosperity.

Carney has some big decisions to make as rumours abound that the bank is considering ending quantitative easing and raising interest rates.

Policy decisions expected

Similar comments made in the States by Federal Reserve chairman Ben Bernanke sent equity markets around the world into a tailspin.

The Bank of England’s monetary policy committee has pegged the official interest rate at 0.5% since March 2009 – the lowest rate in the bank’s 319-year history.

The bank has also pumped £375 billion into the economy as quantitative easing to try to stimulate growth without much success.

More recent lending for funding policies that make money available to the high street banks and mortgage lenders at competitive rates have reduced the need for easing.

Carney will have to make some decisions about central banking policy to see where Britain goes now as the current policies have drifted somewhat during the past few months awaiting his arrival in Threadneedle Street.

Behind-the-scenes clash

Behind the public persona, Carney is married to a British economist, Diana Fox. The couple met at Oxford University. They have four children.

Carney rose through the ranks at Goldman Sachs and then moved to the Canadian Department of Finance.

He joined the Bank of Canada as deputy governor and was promoted to governor for a seven-year term. He is widely recognised as shielding Canada from the worst effects of the banking crisis and ensuing global recession.

Carney has also chaired some important policy and regulatory banking groups while acting was governor of the Bank of Canada.

He has already ignited some controversy in the bank by accusing executive director of financial stability Andy Haldane of failing to grasp the basic facts about bank regulation, which is Carney’s specialist subject.

The pair disagree over banking capital requirements and separating the investment and retail arms of Britain’s banks.