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OPINION

SEVEN DAYS: 21 December 2012

SEVEN DAYS: 21 December 2012
December 21, 2012
SEVEN DAYS: 21 December 2012

Costly Carney

Governor's pay rise

The incoming governor of the Bank of England, Mark Carney, will be paid considerably more than the current governor, Sir Mervyn King. The current governor is paid £305,000 a year but Mr Carney's take home pay will be £480,000, on top of which he will be offered a 30 per cent cash allowance in lieu of a pension plus a generous £250,000 a year towards his accommodation costs. The Bank justified the pay package by saying that Sir Mervyn King's pay is boosted to the tune of around £300,000 by his pension package, which Mr Carney will not benefit from.

Cliff closes in

Deal progress

The fiscal cliff looms ever closer in the US although there are growing signs that a deal can be sealed between the White House and Congress before the New Year deadline. President Obama and John Boehner, the leader of the Republicans in the House of Representatives, have met several times now amid signs that concessions by both sides have made some form of compromise possible. Meanwhile, Mr Boehner has floated a 'Plan B' this week in case an agreement cannot be reached which would see a number of Bush-era see tax breaks extended once again rather than automatically withdrawn.

Rising sun

Abe returns

Shinzo Abe has returned as prime minister of Japan after his LDP party won a crushing victory in its general election. Mr Abe, who previously served as prime minister in 2006, was returned on a ticket which promised action to reinvigorate the Japanese economy. Indeed, in his first meeting with the Bank of Japan since the election, Mr Abe called for more aggressive action including a 2 per cent inflation target, up from the current 1 per cent, and "unlimited" monetary easing.

Libor loot

UBS hit

The year just goes from bad to worse for UBS after the Swiss bank was hit by fines totalling £940m for its involvement in the rigging of London Interbank lending rates (Libor). After the brouhaha around Barclays earlier this year, when it was fined £290m for Libor-rigging, UBS has now been fined more than three times as much, including $1.2bn to the US authorities. The Financial Services Authority reported that at least 45 UBS employees were involved in the rigging over a five-year period from 2005 to 2010.

Return of old king coal

IEA prediction

The International Energy Agency (IEA) has predicted that coal will make a stunning comeback as the world's biggest source of energy, surpassing oil by 2017. The main driver for the resurgence of coal is the surge in energy capacity in emerging nations such as China and India, where dozens of coal-fired power stations are being built, coupled with a continued boom in demand for steel and cement production in the emerging world. Global demand for coal is expected to grow by 2.6 per cent a year for the next five years, with India and China leading the way; indeed, China will account for half of the world's coal consumption by 2014.