November 14, 2012 10:43 pm

Outsider makes her pitch to take BoE role

Sharon Bowles is the outsider in the contest to be Bank of England governor and very proud of it.

Should the shortlisted MEP prevail it would not only be remarkable for breaking the 318-year run of male governors at Threadneedle Street. She would have done so as a pro-euro Liberal Democrat politician with a standout record in crafting EU financial regulation but no formal training in economics.

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IN UK Economy

Yet this unorthodoxy is exactly her pitch. She stands apart from the “erudite academic elite” that ran the BoE from the top-down but “doesn’t seem to have come up with all the right answers”.

“What’s the point of having 2,000 economists if you sit at the top second-guessing them all?” she told the Financial Times, days after her interview for the governorship. “I think the choice has to be made. Do you want to continue as before with experts’ experts, where almost everybody involved is an Oxbridge educated economist from a single decade?

“Look at the monetary policy committee, and the people who’ve been on it and the shocking lack of diversity. I’m not talking about gender here,” she adds. A Bowles era, she says, would be about shrewd management to break down BoE silos, give oxygen to new ideas and bring the diplomatic skills it needs to exercise its new powers and responsibilities.

Her rivals are four City stalwarts: Lord Burns, the former head of the Treasury; Sir John Vickers, of the independent commission on banking; Lord Turner, chairman of the Financial Services Authority; and the favourite, Paul Tucker, BoE deputy governor. Ms Bowles jokes that even the BBC took a “dare not speak her name” approach to her candidacy when reporting the shortlist (her identity was the only one left as a mystery). “I’m European so they want to forget about me,” Ms Bowles quips.

Indeed, it is this dimension that convinced Ms Bowles to apply. She fears that the City’s success as the home of European finance will be fatally undermined if the UK is “ostracised from Europe” and attempts to stand at arm’s length from the EU.

As the eurozone banking union takes shape, she argues it is crucial that there is a “harmonious” relationship between the EU’s two most important bank supervisors – the BoE and European Central Bank. The relationships she has built while overseeing the ECB put her in a unique position to do that, she says.

“I think that to be able to stay chair of this committee in such turbulent times for the eurozone is a testimony to being able to do that. A clean pair of hands to build the relationships even whilst the UK is busily being hated for everything that it does. In one sense that’s helpful,” she said.

Ms Bowles has put intense pressure on the ECB over the lack of women on its executive board. She is also convinced that more women in the City would “put the brakes on some of the over-exuberance and quasi-immorality”. While she did not apply to make a point about better representation of women, Ms Bowles sees her selling points are related to her gender.

“My colleagues have given me a lot of respect for basically practising what we’re preaching and being prepared to take all the brickbats,” she said. “I’m probably the favourite candidate in European circles,” she adds with a smile.

BACKGROUND NEWS

While far from a household name in the UK, Sharon Bowles is probably Britain’s most influential voice in the European parliament, chairing a powerful committee on economic and monetary affairs, Alex Barker reports.

Her committee’s responsibilities are so wide-ranging and essential to the eurozone – including holding the European Central Bank to account – she is probably the last British politician that will be allowed to hold the position.

Ms Bowles says it took her 11 pages of her application for Bank of England governor to explain her job. Most important for the City of London is the fact that she has had her “hands on every single piece of financial regulation that applies to the UK”.

This involves not just scrutinising Brussels’ new proposals on markets, bank capital rules and insurance – but negotiating every line of the law with EU member states. She says that while David Cameron will focus on “one or two big nasties” in a proposal, she covers “the other 6,000 amendments”.

Ms Bowles was previously a patent lawyer, running her own business for 25 years. Given her schooling in physics and maths, she has no concerns about her lack of economic training. “It is not rocket science – and I can do that,” she says.

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