Wednesday, 08 May, 2019
OE Bailey front runner for BOE Gov.. story from MNI
BOE Bailey front runner for BOE Gov.. story to come
The UK’s volatile political environment is making the search for the next governor of the Bank of England more difficult, tilting the scales towards a seasoned, home-grown appointee with diplomatic skills such as BOE veteran Andrew Bailey, MNI understands.
Bailey, who joined the Bank in 1985 and currently heads the Financial Conduct Authority, is seen as the leading candidate, in part because he has demonstrated the ability to function well during shifts in regimes.
Chancellor of the Exchequer Philip Hammond has said he wants to find a replacement for current Governor Mark Carney by October, and candidates will be assessed not only according to whether they have the capacity to flourish for a full term, but also according to whether they will get on with the head of the Treasury. But there is no certainty that the UK’s finance minister, or even the prime minister, will still be in the job by then.
A future governor might have to respond to proposals such as those by Shadow Labour Chancellor John McDonnell and his colleagues in the opposition Labour Party, including setting the BOE a productivity target. This would be an anathema to conventional central bank thinking, but any response would have to avoid the danger of the BOE’s becoming embroiled in politics.
BOE Chief Economist Andy Haldane, himself a candidate for the top job, was questioned at a hearing of the cross-party Treasury Select Committee about how a central bank could boost productivity to meet a target. Haldane skirted around the issue before Carney stepped in and said, bluntly, “we wouldn’t have the tools.”
Haldane is a serious contender to head the BOE. A highly skilled communicator, hr is spearheading the Bank’s development and adoption of real-time data. He also chairs the newly-formed Industrial Strategy Council – demonstrating his appeal to the government, He can expect questions, however, over how we would handle the nuts and bolts of a future financial crisis,
Another matter to be taken into account in the search would be whether the revelation of the identity of the new Bank of England head would in itself bring prestige to the institution or to the government
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