Bank of England Governor Mark Carney is the new face of gender equality in the City of London.
His comments last week on the lack of women on the central bank’s rate-setting Monetary Policy Committee have raised pressure on Chancellor of the Exchequer George Osborne to broaden the pool of applicants and ensure the next person he picks is female.
Carney, the former Bank of Canada governor, told the BBC Aug. 8 the absence of women on the MPC since mid-2010 is “striking.” Since the central bank was granted operational independence from government in 1997, only four of the 33 people who have served on the panel have been women.
“It’s bizarre to have no women on the MPC,” Andrea Leadsom, a Conservative lawmaker who’s one of only two women on the 13-member parliamentary panel that scrutinizes the central bank, said in an e-mail. “This isn’t about feminism, it’s about the essential need for a wide range of views, stemming from a wide range of backgrounds. The lack of diversity in our key regulators and policy-making institutions is a huge drawback to the U.K.”
The last three appointments of part-time MPC officials since Kate Barker left in mid-2010 have been marked by a shortage of female applicants, with a ratio as low as 26 to 1.
Osborne gave Carney a mandate for change at the 319-year-old institution when he picked him as the first foreigner to lead the BOE. He’s immediately changed the way the MPC operates by introducing forward guidance on interest rates. The new governor’s remarks now raise the stakes for the Treasury to contribute to a remodeled central bank.
“It’s the responsibility, obviously, of the government to select the candidates” for the MPC, Carney told the BBC.
The Treasury’s next opportunity to add a woman to the nine-member panel will come when they seek a replacement for Deputy Governor for Monetary Policy Charlie Bean, who retires in June 2014. It’s already missed one chance this year, when Osborne announced last month that Jon Cunliffe, Britain’s permanent representative to the European Union, will replace Paul Tucker as deputy governor for financial stability on Nov. 1.
“I would strongly encourage George Osborne to listen to Mark Carney and encourage more women to apply to the MPC,” Brooks Newmark, a Conservative who sits alongside Leadsom on the House of Commons Treasury Committee, said in a telephone interview. Like Newmark and Leadsom, Osborne is a Tory.
“The government would like to see a greater number of women apply for future appointments and will continue to encourage them to do so,” the Treasury said in an e-mailed statement.
The Treasury has direct authority over seven of the nine positions on the MPC, which consists of five senior BOE staff and four external members, who work outside the bank and serve part-time on the panel.
The external members are appointed by the Treasury. Of the internal members, the governor and two deputy governors are also chosen by the government. The remaining positions are held by the BOE’s executive director for markets and the chief economist, who are appointed by the governor.
“The chancellor is responsible for appointments, but shockingly there have been no women on the MPC since June 2010,” Catherine McKinnell, Treasury spokeswoman for the opposition Labour Party, said in an e-mailed statement. “This is an appalling state of affairs which George Osborne should put right.”
Carney’s remarks were his second in less than 24 hours on the status of women in the U.K. He said Aug. 7 the harassment of campaigners for a woman to appear on U.K. banknotes was “shocking.” He announced last month that 19th-century novelist Jane Austen would appear on the next 10-pound note, ensuring the presence of at least one female historical figure on the currency.
Before taking up his appointment officially on July 1, Carney also appointed Charlotte Hogg as the bank’s chief operating officer, making her its most senior female employee.
An issue with recent MPC appointments has been a shortage of female applicants. Thirty-four men and four women applied for the spot that was awarded to Martin Weale, who replaced Kate Barker, according to the Treasury. There was only one woman among the 27 people who applied for the position that was filled by Ben Broadbent in June 2011. For the slot that was taken by Ian McCafferty in September 2012, 22 men and seven women applied.
The Treasury must take the lead in recruiting women to apply for new jobs, Karen Mumford, economics professor at the University of York in northern England and chairwoman of the Royal Economic Society’s Women’s Committee, said in a telephone interview. She said it can encourage more female applicants by showing women that the job can be suitable for them.
“For those sorts of positions, you only apply if you’re asked, and to apply cold turkey would be surprising,” Mumford said. “They’ve got to go out headhunting to encourage people to apply.”
There may be a reluctance on the part of women to engage in self-promotion, said Richard Disney, a part-time professor at the University of Sussex in Brighton and a fellow at the Institute for Fiscal Studies. He’s also a member of the RES’s Women’s Committee.
“Sometimes women economists aren’t so keen to put themselves forward,” he said. “There are a lot of male economists in finance who aren’t shy of blowing their own trumpet, and maybe female economists don’t see themselves in that way.”
Disney, Mumford and lawmaker Newmark said there’s no shortage of women to fulfill the role. There are now 70 female economics professors in the country, up from one 20 years ago, according to Mumford.
Osborne is “undeniably under more pressure” after Carney’s comments, said Jens Larsen, an economist at RBC Capital Markets in London and a former BOE official. “There are plenty of good women out there. There might be a different pool of candidates the next time around.”
Undergraduate enrollment in economics courses has been a “strong growth area” in the last decade for both men and women, Mumford said. Still, the ratio of women to men taking such courses has dropped to 28 percent from about 30 percent in the past 10 years. The reasons aren’t clear, and the RES is considering surveying undergraduate and graduate students about it, she said.
Attracting women candidates to public service can be a matter of improving working practices, said Larsen, who worked at the BOE from 1998 to 2010. The bank moved “very fast” during his time there to introduce flexibility, such as allowing people to work from home and discouraging meetings in the early evening.
“These institutions that struggle to compete on salaries have to find other dimensions to retain talent,” he said. “One of the ways to retain talent is to offer women great career opportunities and a more balanced lifestyle than in a job like the one they may currently have.”
Carney said last week that for its part, the central bank must encourage female economists “all the way through the ranks.” That will encourage the diversity of opinion needed to improve macroeconomic policy making.
“The bank’s approach is to build up the pipeline, and then hope that when you have to make the decisions on who gets promoted you’ll have a deep pool of people to choose from,” Larsen said. “It’s just a matter of time.”