Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
10,741.35-177.35
Stock Analysis, IPO, Mutual Funds, Bonds & More

Rajan signals Brexit politics deterred him from seeking BOE job

Rajan said central banking “has become much more political in recent times” as an explanation for why not.

Bloomberg|
Updated: Jul 20, 2019, 06.56 PM IST
0Comments
BCCL
Raghuram-Rajan-
“I’m perfectly happy in my job,” he said. “I haven’t applied for any job.”
By Simon Kennedy

Former Reserve Bank of India governor Raghuram Rajan has indicated the political challenges posed by Brexit were the reasons he didn’t apply to head up the Bank of England.

In an interview with the BBC, Rajan confirmed he hadn’t sought the position and cited the fact that central banking “has become much more political in recent times” as an explanation for why not.

The U.K. government is seeking a successor to Mark Carney, who will step down in January. Carney has been thrust into the heart of the Brexit debate either by having to adjust monetary policy to react to it or because of criticism from some lawmakers that he is overly pessimistic about the economic risks of leaving the European Union.

“It’s best a country has someone who understands the political situation within that country and knows how to navigate that,” Rajan told the BBC. “It’s obvious I’m an outsider and I have very little understanding of the deep ebbs and flows of politics in that country.”

Rajan, who now teaches at Chicago Booth School of Business and once served as chief economist of the International Monetary Fund, was recently named as the second most likely to get the BOE job by economists in a Bloomberg News survey. He trailed Andrew Bailey, the chief executive of the Financial Conduct Authority.

‘Perfectly Happy’
U.K. Chancellor of the Exchequer Philip Hammond started searching for a replacement for Carney in April and has attracted 30 applications. He met with Rajan in January, according to the Treasury, although Rajan declined to tell the BBC if he had been approached to run the central bank.

“I’m perfectly happy in my job,” he said. “I haven’t applied for any job.”

Hammond, who is likely to exit the Treasury once a new prime minister takes office next week, had spoken of looking for a new governor with international experience. Former Federal Reserve Chair Janet Yellen also didn’t apply, a person familiar with the matter said this week.

The reluctance of foreign economists to step forward may boost the chances of domestic contenders such as Bailey or current BOE officials Andrew Haldane, Jon Cunliffe, David Ramsden and Ben Broadbent. Others linked to the role include Shriti Vadera, the Santander U.K. Plc chair, and Sharon White, outgoing chief executive officer of regulator Ofcom.

Gerard Lyons, a former economic adviser to Boris Johnson, the likely next prime minister, has been interviewed for the job, according to The Times.

Rajan knows first hand of the political challenges of being a central banker. He left India’s central bank after just one term amid heavy criticism from segments of the government for offering opinions on matters unrelated to monetary policy.
0Comments

Also Read

Boeing 737 MAX unlikely to restart operations by 2020

Two new Boeing Chinook helicopters arrive for IAF

AAI signs technical assistance pact with Boeing

Boeing posts nearly $3 billion Q2 loss on Max groundings

Boeing may cut or halt 737 output if return to service delayed

Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service