Could a Canadian Be the Next Bank of England Governor?
Staff Writer, CNBC.com
A high-profile job with a hefty salary, travel, and an almost guaranteed knighthood (unless you really mess up) will be advertised in The Economist this week.
While the official starting pistol in the race to replace Mervyn King as Governor of the Bank of England next July will be fired on Friday, there has already been plenty of jostling for position from potential candidates. (Read More: Race Begins to Replace King)
The succession process will be even more closely watched than usual as the U.K. economy continues to struggle to recover from the credit crisis, and its biggest banks face questions over their conduct. (Read More: What Can Be Done to Restore Trust in U.K. Banks?)
There has been a groundswell of support for Mark Carney, governor of the Bank of Canada, from high-profile City sources over the summer. He is viewed as having the experience to run the Bank effectively. Unlike Deputy Governor Paul Tucker, Carney is far removed from recent scandals and British banking policies.
However, Carney has publicly played down reports he may cross the Atlantic, and said in August he is “very focused” on his current job.
If he is given the post, which is ultimately awarded by the Queen although in effect decided by the Chancellor of the Exchequer George Osborne and Prime Minister David Cameron, he would be the first non-British Governor of the Bank of England.
Osborne said Wednesday that he wants a “fair and open competition” for the post. The frontrunner for months – even years – was King’s deputy Paul Tucker. The cloud cast over his name following the scandal over manipulation of the London interbank offered rate (Libor) is believed to be too great to make his appointment viable.
Over the summer, Tucker was forced to defend himself against the suggestion that he encouraged Barclays, which paid a 290 million pound fine over Libor fixing, to artificially lower rates at the height of the credit crisis. (Read More: Bank of England Official Implicated in Libor Scandal)
Adair Turner, head of the Financial Services Authority, has made the most public play for the job, with a series of speeches around the problems in the U.K.’s banking sector. The regulator he heads is being disbanded in favor of a new authority next year, so he will have time on his hands. But Turner polarizes opinion in the banking community.
Another U.K. based name in the frame is Gus O’Donnell, the former Cabinet Secretary who was mentioned as a potential replacement for Marcus Agius as chairman of Barclays.
If you want to place a bet on who will secure the job, bookmaker Paddy Power has Turner as the frontrunner, followed by O’Donnell and Tucker.
Jim O’Neill, the chairman of Goldman Sachs Asset Management known for coining the term BRIC, has also been listed as a contender. While he has the knowledge, appointing someone from a bank many members of the public view with suspicion, following the financial crisis, might not go down well.
Written by Catherine Boyle, CNBC. Twitter: @catboyle01.