The new governor of the Central Bank, Dr Patrick Honohan, has decided to address the situation where the holder of his post was paid almost three times the salary of the chairman of the Federal Reserve, Ben Bernanke.

John Hurley, who finished as governor of the bank a few weeks ago, was paid €369,078 per annum, plus he was provided with the use of a car. The salary was agreed even after Hurley took a 10% pay reduction in November 2008.

Honohan, a former Trinity College academic who made his first public speech a fortnight ago, will have his pay set by the Body on Higher Remuneration, which is expected to report shortly. However the Central Bank told the Sunday Tribune last week, ahead of the report's publication: "It will be lower than that of his predecessor.'' However the bank refused to say what agreements Honohan may have with the government regarding his salary.

Honohan has been well received in the financial world. He will have a seat on the governing council of the European Central Bank, which sets Europe-wide interest rates. Honohan however has said his priority will be dealing with reform of the Irish financial system.

The last governor of the Central Bank faced a large amount of controversy over his salary which was much larger than that paid to others running central banks, like Mervyn King or Bernanke. According to US filings, Bernanke was paid $191,300 in 2008, which translated into €127,447.

Each governor is appointed by the President, on the advice of the government, for a period of seven years. Hurley was first appointed in March 2002 and was reappointed for a second term on 11 March this year.

Major post holders in the Irish public sector are expected to be hit with cuts when the Body on Higher Remuneration reports. Among those likely to see their salaries reduced are government ministers and the Taoiseach. Ministers took their first voluntary pay cut in September 2008.

The biggest difficulty has been in finding a formula to reduce the pay of the judiciary who jealously guard their independence. Under Article 35.5 of the constitution the remuneration of judges cannot be reduced during their "continuance in office''.