Chancellor Philip Hammond on Wednesday fired the starting pistol on the search for a new Bank of England governor to succeed Mark Carney.
An advertisement for the role of BoE governor was posted by the government with an annual salary of £480,000, the same as when Mr Carney was appointed in 2013, although the Canadian also received a housing allowance of about £250,000 a year.
Mr Hammond stressed his preference for an internationally respected successor to Mr Carney, who will step down at the central bank in February. “It is very important to have someone, not only who can do a first-class job at home, but someone who commands respect in the international arena,” the chancellor told the Commons Treasury select committee.
The new BoE governor is set to take over at a time when interest rates are stuck near zero and huge uncertainty hangs over the UK because of Brexit.
The economy has a split personality, with record employment offset by sluggish output growth and feeble productivity performance. The contradictory picture means questions around the future direction of interest rates will probably be daunting, since policymakers have limited insight into how hot the economy is running.
The advertisement for the BoE governor calls for potential candidates with “substantial experience of working at the most senior level in a major bank or other financial institution or of working in, or involvement with, central banking”.
Andrew Bailey, head of the Financial Conduct Authority, is seen as the most qualified British public sector candidate, although deputy BoE governors Ben Broadbent and Jon Cunliffe are expected to be interested in the role.
Other possible UK candidates include Shriti Vadera, who chairs Santander UK and has recently helped co-ordinate the City of London’s response to Brexit. Minouche Shafik, director of the London School of Economics, would also be a well-qualified candidate, having previously served as a BoE deputy governor.
Potential international applicants include Raghuram Rajan, a professor of economics at the University of Chicago who led the Reserve Bank of India and is a former chief economist of the International Monetary Fund. He has said he has a good job in academia, but has not ruled out the possibility of taking the BoE role.
Mr Hammond said he hoped to appoint someone who was committed to serving a full eight-year term as BoE governor, but was willing to make an exception for an “outstanding candidate”. “My preference would be of an eight-year term,” he added. “Stability has a value.”
Mr Carney was appointed for eight years, but said he would serve only five and then twice extended his tenure, creating a degree of uncertainty over the position. Treasury officials were clear that there was no chance that Mr Carney would extend his tenure again.
The hiring process will be overseen by an executive recruitment company for the first time to ensure that all options are explored and that the government has considered diversity issues.
The Treasury has appointed Sapphire Partners, the headhunters that helped it hire two external members of the BoE’s Financial Policy Committee last year.
Candidates to be BoE governor have six weeks to apply, with interviews scheduled for the summer. The decision will be announced in the autumn to give the successful applicant sufficient time before starting the role at the beginning of February.
However, the autumn announcement means that priorities for the job could change should prime minister Theresa May no longer be in office: a new premier and chancellor may have a very different type of candidate in mind.
As a crown appointment, the BoE governor is formally selected by the Queen, but the recruitment panel will include Tom Scholar, permanent secretary to the Treasury; Charles Roxburgh, the second permanent secretary; Brad Fried, chairman of the BoE court of directors; and Kate Barker, a former external member of the central bank’s Monetary Policy Committee.
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