A thankless task?

Constantly answering to the press and politicians alike, the job of a central banker is never easy. We try to dig out some of the job’s merits, comparing some of the best and worst performers

 
 

Despite playing influential and crucial roles in the banking world, central bankers do not always earn exactly what members of the public might expect, based on the size and performance of the country they are representing.

Britain’s top central banker, Governor of the Bank of England, Mervyn A. King, drew a salary of around £300,000 in 2009. He has been serving in this role for almost a decade, having been appointed in July 2003, following the departure of steady Eddie – Lord Eddie George. At the time, the UK’s share of global GDP was just over three percent according to Business Week. In comparison, the Irish central banker, Patrick Honohan, had a somewhat lower salary, at approximately £227,000, but when compared to Ireland’s actual percentage of global GDP, at 0.25 percent, his salary could be considered comparatively large. On the other hand, Ireland has a much smaller population, meaning that using the percentage of GDP is perhaps not the best means of comparison. Corrective factors, accounting for population size, would probably show that the salary is actually proportionate.

Central bankers in other countries tend to have lower salaries than their Irish and UK counterparts. For example, one might expect the top central banker in the US to earn more than Mervyn King, based on the size of its economy, but in fact Ben Bernanke, the Federal Reserve chairman, has a relatively small $196,700 annual salary. The percentage of global GDP that the US economy is responsible for is 20.42 percent, yet Bernanke’s salary is several times smaller than that of his Irish and UK counterparts.

Australia is the unexpected home of one of the top paid civil servants in the world, Glenn Stevens, with a salary of over $1m; the Australian dollar is currently worth slightly more than the US dollar. Despite the economic downturn, in April 2011, Stevens’ salary rose above the $1m mark, the event being announced in April 2011 on several Australian news sites. Central bankers being paid over $1m for their services is not unheard of, however. In previous years, Hong Kong central banker, Joseph Yam, was well known for being the highest paid banker, with a $1.32m salary in 2007. Yam has since been replaced by Norman Chan, who receives a salary of around $800,000.