City salaries luring ‘too many’ grads, says King

Talented graduates are failing to look properly at career options, lured instead by the huge bonuses available in City jobs, the governor of the Bank of England has said.

Mervyn King said he feels it is ‘rather unattractive’ that City jobs dominate career options for young people purely because of the available compensation packages.

He told the Treasury Select Committee:

"It's not a very attractive situation that such a high proportion of our talented young people naturally look at City and think it is the only place to work in. It shouldn't be. It should be one of the places, but not the only one."

“I think that banks themselves have come to realise in the recent crisis that they are paying the price themselves for having designed compensation packages which provide incentives that are not, in the long run, in the interests of the banks themselves and I would like to think that would change.”

King also said that it is the people running the small and medium-sized businesses, who ‘are paid far less than people in the city’ who impressed him.

"They export to maybe a dozen countries, operating with two or three thousand employees,” he said. “They have a tiny, tiny number of highly qualified people working for them and the rest are ordinary, highly motivated people drawn from the community.”