Mark Carney signals Bank of England economic policy shakeup Mark Carney defended his controversial £800,000-a-year pay and perks package. Mark Carney, the Canadian headhunted by George Osborne to run the Bank of England, has told MPs he expects to undertake a thorough review of the UK's economic policy regime when he arrives at Threadneedle Street in July. Appearing before the cross-party Treasury select committee, Carney, who is currently the governor of the Bank of Canada, praised the process of five-yearly reviews of how inflation-targeting works in Canada - and conceded that he had discussed with the chancellor the possibility of altering the framework. "The flexible inflation-targeting framework should remain broadly in place, but details need to be reviewed and could be changed," he told MPs. In more than 40 pages of written evidence submitted to the committee, he characterised his conclusion on whether to ditch the current framework as: "The bar for change is very high but review and debate can be positive." Carney appeared to back away from one idea he mooted in a speech in December - that the current inflation target could be replaced by a so-called "nominal GDP" target, which could force the Bank to do more to kickstart growth. But he insisted to MPs that more could be done under the current framework, which he called "flexible inflation targeting," to stimulate the moribund economy, including offering so-called "guidance" to reassure investors that the monetary policy committee would not tighten policy until the economy has fully recovered. The Federal Reserve has promised that it will continue with the emergency policy of quantitative easing, until the unemployment rate has fallen to 6.5% or below. At the beginning of the hearing the governor-in-waiting insisted his more than £800,000-a-year pay and perks package was "equivalent" to that of outgoing boss Sir Mervyn King. Carney defended his controversial pay deal - which includes a £250,000 housing allowance - as being in line with that of King on a "pay and pension" basis. But MPs on the Treasury select committee questioned whether he was concerned about "resentment" among Bank of England staff, given that their pay has been frozen for two years. Carney will be paid the accommodation allowance on top of a £480,000 salary, well above the £305,000 pay level of King. "I'm moving from one of the least expensive capital cities in the world - Ottawa - to one of the most expensive capital cities in the world," he added. Committee member David Ruffley told the Carney: "On the question of pay, you will be paid considerably less than recent England football managers and I think you are likely to have more success than them." Carney rejected suggestions that his new position would essentially put him at the head of a "court of the Sun King," insisting that the oversight structures in place meant that he will be accountable through a number of mechanisms, including the hearings of the Treasury committee itself. Carney made clear that he believes central banks have a role in dealing with the issue of income inequality and unemployment. The US had seen a faster rise in the income gap between rich and poor than Canada over recent years, and this had translated into long-term unemployment, he told the committee. He added: "One of the challenges in that environment, that starts with the marked increase in inequality that is the case in the US, is the dangers of persistent unemployment and the gradual loss of skills because of prolonged unemployment, which has severe consequences for the individual but also for the productive capacity of the economy. That is one of the challenges that has been faced by the [US] Federal Reserve and one of the reasons for which they have been as appropriately aggressive in their conduct of monetary policy. Carney agreed that the perception that bankers have not paid the price for the 2008 financial crash was "a catalyst" to the worldwide protests of the Occupy movement. "I think clearly that was a catalyst," he told the committee. It wasn't just the fact that the financial crisis triggered a very sharp recession here as well as in the US, but that the senior-most officials in those financial institutions appeared to escape unscathed and not pay the price.