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Bank of England's Carney to Get $406,000 Housing Allowance

Incoming Bank of England Governor Mark Carney
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Incoming Bank of England Governor Mark Carney

Bank of Canada Governor Mark Carney will get a 250,000 pound ($406,000) annual housing allowance when he starts as governor of the Bank of England next year, on top of a salary of 624,000 pounds, the BoE said on Wednesday.

The payments to the former Goldman Sachs investment banker will be well above what current BoE governor Mervyn King receives - a salary of 305,000 pounds and a generous pension.

Britain's finance minister George Osborne went to great lengths to attract Carney to Britain, changing the application process and allowing Carney to serve a five-year term rather than the eight-year term that had originally been foreseen.

While Carney's salary was announced at the time of his appointment, the scale of his housing allowance had not previously been made public.

"The (BoE's) non-executive directors ... confirmed their agreement to and support for an annual accommodation allowance of 250,000 pounds for the next governor and his family which had been offered to him prior to his appointment,"the BoE said in a statement on Wednesday.

Carney's appointment comes at a time when Britain's economy is struggling to emerge from recession and the government is cutting most social benefits in real terms. The average full-time salary in Britain is 26,500 pounds a year, though this rises to 34,000 pounds in London.

The BoE has explained Carney's higher salary by noting that the central bank will take over most of Britain's bank regulation next year, and that Carney - unlike King - will not be entitled to a pension.

"The cost to the Bank of enrolling him in the now-closed pension scheme previously available to the Governor and Deputy Governors would approximate to more than 100 percent of salary," the bank said.

"This compares with the 30 percent cash allowance in lieu of pension to which the next Governor will become entitled."

The 624,000 pound salary includes this cash allowance.

Osborne has praised Carney for helping Canada avoid the worst of the financial crisis, and playing a major role in setting the international agenda on bank regulation.