Bailey’s Biggest Job Hire at BOE Showcases Priorities of New Era
Bank of England Governor Andrew Bailey will soon make possibly the most consequential hiring decision of his tenure as he picks a successor to outgoing Chief Economist Andy Haldane.
The appointment is the only Monetary Policy Committee member that the central bank chief oversees himself, with all others selected by the Treasury. The winning candidate will not only manage a major forecasting operation, but can also expect to become one of the BOE’s most public faces as its leading in-house intellectual.
For Bailey, the bank’s 121st consecutive white, male governor, the selection will also reveal his determination to combat the lack of diversity within its upper echelons. Institutions from the International Monetary Fund to the World Bank and OECD have already blazed a trail there with female chief economist appointments.
“They are really looking for the absolute perfect influential economist that can lead and add diversity,” said Sanjay Raja, U.K. economist at Deutsche Bank AG. “Only a handful of candidates will genuinely meet the criteria.”
Raja says they might include three former BOE officials: current Treasury Chief Economist Clare Lombardelli, Jagjit Chadha, director of the National Institute of Economic and Social Research, and Rain Newton-Smith, chief economist at the Confederation of British Industry.
There’s no obvious internal candidate, even though the last two incumbents, Haldane and Spencer Dale, won the job through promotion. With headhunters searching far and wide, a surprise winner, perhaps from U.S. academia, can’t be excluded.
While the chief economist is secondary in pay and responsibility to the deputy governors, the job’s profile is eclipsed only by Bailey himself.
That’s certainly how Haldane fulfilled the role, using it as a pulpit for ideas beyond conventional monetary policy, ranging from inequality to automation. His blue-sky thinking made him a contender for governor before Bailey won out, but also attracted controversy.
The closing date for applications was last week, and Haldane leaves later this month, upping the pressure on Bailey and Deputy Governor Ben Broadbent to choose a successor. Here’s a look at their possible criteria.
The BOE says the job involves “a wider economic thought leadership role,” and leading its Research Hub. That requires someone with intellectual chops to lead what Raja says may be one of the largest public research arms in Europe.
For former MPC member Andrew Sentance, this is the most important part of the job. He complained in an article last week that “thought leadership and academic aspects” have been “crowded out.”
The BOE’s ambitions here are hard to judge. A Nobel prize winner would be a coup, but their ranks are hardly diverse. When Esther Duflo shared the award in 2019, she was only the second female economist ever to have done so.
Independent thinking might also count. Haldane sometimes stood alone on the MPC, most recently as the only member to vote to curtail bond-buying.
The chief economist is a manager, meaning the BOE is looking for someone who can oversee everything from staffing to budgeting. That criteria could benefit those who have run big teams. Lombardelli, Chadha, and Newton-Smith can all claim considerable experience here.
What those potential candidates also share is the possibility of bringing diversity to an institution visibly lacking it. The gender imbalance at the top may be about to worsen after Joanna Place, the BOE’s most senior woman, soon leaves her role as chief operating officer.
There’s also only one female policy maker on the nine-member MPC -- Silvana Tenreyro. An academic of Argentine origin who is currently president of the European Economic Association, she could herself be a viable contender. So could Kristin Forbes, a former MPC member at the Massachusetts Institute of Technology, who previously worked at the White House.
Haldane carried the BOE’s message beyond its usual constituency of investors and business leaders, making him a star turn at events where central bankers wouldn’t normally tread.
The BOE wants someone “able to engage with, and explain complex concepts to, a very wide range of audiences,” suggesting they would gladly retain some of his stardust.
This might be one of the hardest criteria to gauge before an appointment: Haldane’s platform to engage with the public was limited until he got the job.
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