Bank of England's Range of Views Was Limited, Critic Says
The Bank of England’s Monetary Policy Committee has had a limited range of views because of its lack of diversity, according to Ros Altmann, who lost out in a bid to join the panel in 2012.
A former director-general of Saga Group, which represents pensioners, Altmann is a long-time critic of the BOE’s loose policy and lobbied for officials to consider the impact on savers of its record-low interest rate. In 2012, she applied and was shortlisted for the post of external MPC member, a role that ultimately went to Ian McCafferty.
“I did make it clear at the interview that if they were looking for somebody who speaks the same as them and is from the same background, that isn’t me,” Altmann said in an interview in London. While she didn’t get any feedback on why she didn’t get the job, “I took the inference that’s who they were looking for,” she said. “I’m not saying at all that I was the best person for the role.”
The BOE has come under fire for suppressing diverging views, creating an atmosphere where challenges to policy couldn’t be aired and diminishing the quality of decisions. It’s also faced criticism on a lack of women at policy-making levels, a gender imbalance that persists even after the appointment of Nemat Shafik last month as deputy governor.
Altmann was speaking after a hearing at Parliament’s Treasury Committee, where she said there is “something of a danger of groupthink” at the BOE. “There is a difference typically between a male and a female perspective,” she said. “Finance is very male dominated.”
BOE Governor Mark Carney, who has said the lack of women at the top of the central bank is a concern, is currently implementing an overhaul at the institution. The BOE is also seeking an external member for the nine-member MPC to replace Ben Broadbent, named deputy governor for monetary policy last month. In addition, it’s looking for eight senior officials as part of the biggest management revamp since it won independence to set policy in 1997.
“I would have loved to be on the MPC, not necessarily to change the decisions but at least to make sure there’s a different point of view represented,” Altmann said in the interview. While at Saga she also publicized the impact on savers of the bank’s quantitative-easing policy, which kept government bond yields low and also reduced income to savers.
The BOE has argued that it sets monetary policy for the whole country, and its low rates and money-printing were needed to soften the blow of the financial crisis and support the economy, which in turn should benefit savers.
“There are far more older women than older men, and the Bank of England policy in the post-crisis period had a dramatic negative effect on pensions and annuities,” Altmann said. “The BOE refused to listen to what’s a very important impact of the QE policy. I certainly would have been able to put that point of view across.”
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