ALEX BRUMMER: It is always a political task to be the governor of a central bank
Philip Hammond has found a new lever in his struggle to end Brexit uncertainty.
He argues that the & # 39; is obvious & # 39; that candidates for the next Bank of England governor might be put off by Brexit politics.
The Chancellor did not speak abstractly. After two unplanned expansions, due to the fog of the Brexit, the current director must leave as governor, Mark Carney, in January 2020.
Alex Brummer says that Philip Hammond has found a new lever in his fight to end the Brexit uncertainty
With all due respect to Hammond, his suggestion that Brexit politics could scare off candidates for the governor is a fairy tale. As the governor of a central bank, one of the jobs that most economic policy makers aspire to be.
The idea that a person can be responsible for setting interest rates, combating inflation and keeping the financial system safe without taking decisions with political consequences is naive. In fact, the reputation of central bankers is built in the heat of an oven in the financial crisis.
In the UK, Carney & # 39; s best hour was in the immediate aftermath of the referendum almost three years ago, when he took decisive steps to gain stable confidence when the entire balloon burst.
Mario Draghi ended the euro crisis when, as President of the European Central Bank, he promised to save the euro and launched € 4.65 trillion in quantitative easing.
Being a central bank governor is one of the jobs that most economic policy makers aspire to, says Brummer
In the US, President Carter turned to Paul Volcker to eliminate him from a prolonged political malaise in the summer of 1979.
Ben Bernanke at the Fed and Mervyn King of the Bank of England, both prominent academics, played a major role in saving the banking system and saving capitalism at the time of the financial crisis ten years ago. Politics is what makes central banking a fascinating challenge.
As Governor, while facing challenges and criticism from Brexiteers, Carney stood above the battle, continued to do the work and understood what needed to be done to keep Britain safe after the Brexit. This is in stark contrast to most politicians roaming the Commons cauldron.
Which brings us back to the question of who could apply for the job? Rather, it was believed that global status was important for the next governor, and that is why major international names, particularly the former Governor of the Reserve Bank of India, Raghuram Rajan, have been mutilated. A lack of tactile knowledge of British politics can now make him less of an attractive candidate.
If the pendulum goes back to internal candidates, then chief economist Andy Haldane would be a smart choice. In his semi-government role in creating and measuring the British industrial strategy after the Brexit, he could be a person whose time it is. Deputy Governor Jon Cunliffe has supporters because of his deep understanding of how Europe works and a secure pair of hands like the Brexit knots are loose.
Ante-post favorite Andrew Bailey may have been undone by the Financial Conduct Authority and in particular the London Capital & Finance scandal on his waiting list. Santander UK president Shriti Vadera has political experience from her years of advising Gordon Brown.
The idea that one of these potential candidates would lack the political power and judgment to do the right thing for the Bank and the country is a misreading of the power of ambition and challenge.