O’Neill Says He Would Consider Replacing BOE’s King If Asked
“If I was approached, it would be very flattering and something that I would have to think about,” O’Neill, 55, said in an interview with Bloomberg Television’s Ryan Chilcote today in St. Petersburg, Russia. “Nobody’s asked me anything yet. What I think happens is that one has to formally apply when it’s going to be advertised.”
King is scheduled to leave the bank in June 2013 after serving the maximum two five-year terms allowed. Speculation in the press on potential successors has intensified in recent months to include the former chief of the U.K. civil service, Gus O’Donnell, and Mark Carney, head of Canada’s central bank and a former employee of New York-based Goldman Sachs.
When asked in September 2007 if he would be interested in the role at a time when the government was considering whether to reappoint King, O’Neill said he couldn’t imagine that “anyone would be daft enough to offer it to me.” He added that he very much enjoyed his then job as head of global economic research at Goldman Sachs.
Chancellor of the Exchequer George Osborne has said there will be a “proper process” to appoint a new governor and that he’ll start the formal search in the autumn.
The process to replace King comes at a time when the Bank of England is gaining new powers to regulate the financial system. Asked what he would do differently as governor, O’Neill said that inflation targeting by central banks may not be enough to ensure stability on its own.
“I personally believe if you stand back over the past decade or so, inflation targeting, as great as it’s been for the U.K., has turned out to be not sufficient,” O’Neill said. “So I think some additional tools, as difficult as they are, or indicators, particularly ones that relate to the role of the financial system,” might be required, he said.
“I would upgrade the importance of monitoring aspects of credit behavior, and with it parts of bank lending, and what I would call broadly a financial-conditions indicator as a warning sign,” O’Neill said.
Goldman Sachs has historically been a breeding ground for central bank chiefs. Carney, European Central Bank President Mario Draghi and Federal Reserve Bank of New York President William Dudley worked there. Bank of England policy maker Ben Broadbent was also employed by the bank, reporting to O’Neill.
O’Neill took up his current position in 2010 after a career at the investment bank covering currencies and economics, during which time he created the BRICs acronym to describe large emerging markets. Before joining in 1995, he worked at Swiss Bank Corp. and Bank of America Corp. In 2010, he led a group of investors seeking to buy English soccer club Manchester United.
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