HSBC Said to Tap Bank of England Again For U.K. Economist Post
Bank of England official Simon Wells, who led a team analyzing British economic data, resigned to join HSBC Holdings Plc (HSBA), two people with knowledge of the matter said.
Wells will join the bank’s research department as U.K. economist this month, according to the people, who declined to be identified because the move isn’t public yet. He worked in the central bank’s monetary analysis division, which is led by Chief Economist Spencer Dale.
HSBC has made a habit of tapping the Bank of England for economists to cover the U.K., having previously attracted officials Karen Ward in 2006 and John Butler before that. Wells’s move, which follows Goldman Sachs Group Inc. (GS)’s hiring of economist Andrew Benito in June, is the latest in a trickle of defections to the banking industry as public sector austerity prompts central bank Governor Mervyn King to freeze staff pay.
“He’s definitely a loss to the bank,” said Richard Barwell, an economist at Royal Bank of Scotland Group Plc and a former Bank of England official. “It’s the same old problem. The very best people will be attracted to the private sector, where they get more money and intellectual freedom.”
The central bank’s governing board said in its annual report this year that the challenge of keeping talented and experienced employees poses a risk to its ability to conduct monetary policy effectively. With staff subject to the government’s two-year salary freeze, King has authorized measures such as curbing canteen food prices to boost morale.
A Bank of England spokesman declined to comment on the resignation and said Wells was unavailable. A spokesman for London-based HSBC, Europe’s biggest lender by market value, also declined to comment.
Wells was head of the U.K. Team, reporting to Phil Evans, head of the conjunctural analysis and projections division, who reports to Dale. He analyzed economic indicators for policy makers, and previously worked in the Financial Industry and Regulation Division, where he wrote a paper on systemic risks from U.K. interbank exposures.
Wells is joining a bank where the house view is currently that the Bank of England may need to boost stimulus further. In an Oct. 13 report to clients, HSBC economist Janet Henry said the underlying trend of the U.K. economy is “extremely weak” and that she “would not rule out a further extension” of quantitative easing in early 2012. She anticipated no increase in the benchmark interest rate before the end of 2012.
Aside from Benito, who specialized in analysis of consumer spending, the Bank of England also lost Jens Larsen, a head of division, in September last year to RBC Capital Markets, the investment banking unit of Royal Bank of Canada. The central bank had a net loss of 64 employees in the year through February, according to the annual report. It employed 1,613 full-time staff and 226 part-time staff at that time.
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