Chancellor begins search for new governor at Bank of England

Formally advertised for the first time, the post calls for “a person of undisputed integrity and standing” – a sign that any commercial bankers tainted by this year’s market rate-setting scandal need not apply.

Financial Services Authority Chairman Adair Turner, Britain’s former top civil servant Gus O’Donnell and Deputy Governor Paul Tucker have been put forward as potential replacements for King, who is due to step down next year.

While Tucker – once King’s heir apparent – has been criticised for not spotting earlier the Libor scandal over banks rigging market rates, he could still be in the running for a job which takes on new powers for financial regulation and stability next year.

Many of the favourites to replace King have at least some flaws in their resumes because of their connections to regulation, policy making or commercial banking during the global credit crunch which ravaged Britain’s economy and financial services sector.

“The appointment ... will be conducted through a fair and open competition.

“For the first time in history the post will be advertised,” Chancellor George Osborne said this week.

“As with Mervyn King, we are seeking a governor of intelligence, independence, and integrity. We intend to announce the successful candidate by the end of the year.”

Some respected figures from the world of commercial banking, such as former Barclays chief executive John Varley, have also been mooted as possible candidates.

Treasury officials say Osborne is keen to hear from as wide a field of applicants as possible, indicating that a foreign national could even be considered.

Bank of Canada governor Mark Carney has ruled himself out, after rumours about his candidacy kept popping up.

The Treasury’s advertisement for the job was published in yesterday’s Economist magazine.