MNI INSIGHT: UK Likely To Opt For Safe Choice To Head BOE

-Interview Panel Members Prepared To Go Public If Criteria Ignored

By David Robinson

     LONDON (MNI) - The next Bank of England governor is more likely to be an

experienced technocrat drawn from the interview panel's shortlist than an

outsider imposed by the government, MNI understands, with people familiar with

the process saying panel members would voice public disagreement if their

choices were ignored.

     The job specification to replace Mark Carney, published in April,

stipulated that his successor should have "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". Obvious candidates include

BOE Executive Director and Financial Conduct Authority head Andrew Bailey and

Deputy Governors Jon Cunliffe and Ben Broadbent. Other eligible candidates,

floated in reports to potentially become the first female BOE head, include

former Deputy Governor Minouche Shafik and Shriti Vadera, once a government

minister and currently chair of Santander UK.

     But media have also reported the government could consider appointing a

governor known to be in favour of its Brexit policy, mentioning names including

Helena Morrissey, who heads personal investing for Legal and General, and former

Standard Chartered economist Gerard Lyons. Neither would be an obvious

candidate, and both lack central bank experience.

     While the short-list has not been made public, members of the interview

panel which drew it up would not stay silent if Chancellor Sajid Javid were to

announce a BOE head who was not on it, people familiar with the process said.

The panel, which includes Bradley Fried, Chair of the Court of Directors at the

Bank of England and Kate Barker, former monetary policy committee member,

alongside top Treasury official Tom Scholar, could, if necessary inform the

cross-party Treasury Select Committee that they had not shortlisted the new

governor.

     --REPUTATION

     The TSC holds confirmation hearings into senior appointments at the BOE. It

could not legally block a new governor, but it could refuse to give its blessing

to an appointment following a confirmation hearing. This occurred in 2000, when

it baulked at the appointment of Oxford economist Chris Allsopp to the monetary

policy committee. A similar move regarding the head of the BOE would generate a

political storm.

     The institution could also suffer reputational damage if its new head were

perceived to be a political appointment without the right experience.

     Time is tight to appoint the next governor. The original application window

ran through to June 5, with former Chancellor Philip Hammond telling the TSC

that he expected the appointment to be made "at some time in the autumn," as

this would give allow time for the new governor to become familiar with the

role. Carney is standing down at the end of January.

     At the end of September, Javid told the TSC that the recruitment process

was "on track" but with speculation swirling over a November general election

there is little room for delay.

--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com

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