Canada’s Carney chosen to replace King as governor of BOE

Foreign Appointments

The U.K. isn’t a stranger to putting non-nationals in key positions at the central bank. Its Monetary Policy Committee has included Americans Deanne Julius, on the panel from 1997 to 2001, and Adam Posen, who stepped down at the end of August. Kit McMahon, an Australian, worked at the bank for more than two decades and was its deputy governor from 1980 to 1986.

Carney inherits an institution that has kept its benchmark lending rate at 0.5 percent since March 2009 to aid the economy. Annual inflation has outpaced the central bank’s 2 percent goal every month since the end of 2009, with consumer prices rising 2.7 percent in October.

The BOE is also taking increased responsibility for U.K. financial companies. The current bank regulator, the FSA, will be dissolved and a new Prudential Regulatory Authority will oversee all deposit-taking institutions, insurers, investment banks and clearing houses. It will operate under a board chaired by Carney, who will also lead the Financial Policy Committee, charged with addressing risks to the broader financial system.

In addition to those new regulatory powers, Carney will have to grapple with the bank’s response to three reports commissioned by its governing body that criticized its hierarchical culture under King.

Bloomberg News

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