''We can't have a system - and G20 leaders have made that clear here - we can't have a system where some of those institutions that are pushing back on this are still reliant ultimately on the state and are getting a massive subsidy from the taxpayer.'' Australia's banking regulator, John Laker, last week also hit back at bank lobbying for softer capital rules, arguing against ''turning back the clock on regulatory reform''. A former executive at Goldman Sachs in London, Tokyo, New York and Toronto, Mr Carney moved to the top job at the Bank of England last July direct from his post at the top of the Bank of Canada. He is the first non-Briton to lead the bank that governs the City of London, a transition Britain's Chancellor of the Exchequer joked would be made easier by the fact that as a Canadian he was already subject to the Queen. ''Let's put in some context,'' he said, returning to mutterings about his ideas being too tough. ''If you look at a major mining company in Australia or around the world they will run with let's say 50 per cent equity to total capital. It depends slightly on the industry, slightly on where they are in the cycle, but let's say the average leverage ratio is two to one. The leverage ratio for banks, this 'big blunt horrible blunt instrument', is 33 to one.'' But requiring more capital is just the start, because it could never be enough. The governor wants the world's biggest banks to be backed not just by shareholders funds but by ''bail-in-able bonds''.

''Then the bondholders would know - not depositors, but the bondholders - that, if one of these banks made mistakes and needed to be recapitalised, the bondholders would become equity holders,'' Mr Carney said. ''It has two advantages. One is it is more efficient and builds buffers in the banks. Secondly, it means the bondholders actually pay attention to what the banks are doing. Into the crisis and quite frankly throughout the crisis, the lesson has been that the bondholders have a free ride, because basically they own government debt.'' Mr Carney's aim is to protect depositors and governments to the greatest extent possible. The exact size of the bail-in-able bond requirement would be decided by the Financial Stability Board, most likely at the next G20 meeting in Brisbane. It would not apply to Australian banks, only to the 29 ''globally systemic'' banks whose failure would have worldwide consequences. But he is keen to commend the idea to his Australian counterpart, Glenn Stevens, himself once touted for the job at the Bank of England that Mr Carney got. As governor, the 48-year-old Canadian is also in charge of the more public side of the Bank of England, the one that manages the economy and sets interest rates. And he has become a victim of his own success. In a bid to end five years of stagnation, he gave an undertaking. He would keep interest rates low for as long as it took to cut Britain's unemployment rate from 7.8 per cent to 7 per cent.

''I met over 700 businesses and the message went through loud and clear: it made them more keen to hire, and more keen to invest. We are now the fastest-growing major economy, we have the fastest employment growth on record, inflation back at target, and inflation expectations well anchored. ''It's hard to find a criteria by which you would not judge it successful.'' But unemployment is now down to 7.1 per cent and businesses are getting nervous about the implicitly promised rate rise. ''We've made it through the easy phase of guidance, which is to say what we would not do,'' Mr Carney emphasises. ''Now it becomes a question of what will we do and how and under what criteria as the economy continues to recover. ''By necessity that's a more complex set of judgments. We are trying to provide assurance that: (a) we will not take risks with the recovery; and (b) we are going to set the path of monetary policy in a way that ensures that we see sustainable growth in jobs and incomes and in spending.''

Loading Mr Carney agrees that it won't be easy. But he makes even that sound easy. He ran 10 kilometres from Bondi Beach to Clovelly and back on Saturday morning. He made that, too, sound easy, and he said Sydney was beautiful. With Clancy Yeates