This Bank Needs a Female, Northern Brexiteer
The Bank of England is advertising for a new deputy governor to start next year. As you’d expect, the job posting lists several desired features aspiring candidates should have. But let's hope the winning applicant possesses some attributes not listed in the official job description; ones that would make the central bank's monetary policy committee more representative of the community it serves. That might also help restore public faith in a valuable and somewhat beleaguered institution.
Research suggests managers typically prefer to hire people who remind them of themselves. So there's a risk that the recruiters for the 270,000 pound-per-year ($335,000) role will opt for yet another white, male economist. That would be a mistake, and a missed opportunity. Given the recent assaults on central bank independence and criticism that monetary policy has disadvantaged huge swathes of the electorate, it's more important than ever that policy makers reflect the diversity of society as a whole.
Here, then, are some of the attributes the government should be looking for as it trawls through the applications for this prestigious post.
Shatter the Glass Ceiling
The monetary policy committee has nine members, of whom five are Bank of England staffers and four are external appointments. Minouche Shafik’s departure, more than two years before she was due to depart, leaves just one woman, the American economist Kristin Forbes, on the panel — and her three-year term expires in the middle of next year. Of the 30 previous panel members, only four were women, including Rachel Lomax who served as deputy governor from 2003 to 2008. Moreover, Lomax and Shafik are the only female members who were central bank staffers rather than external appointments.
So it’s pretty obvious what gender the next Bank of England member should be to avoid the “male, pale and stale” accusation that’s all too appropriate in many, if not most, public appointments. It would also be welcome if, given a choice between two equally qualified candidates, the selectors gave some weight to the desirability of hiring a black, or Muslim, or disabled worker.
Location, Location, Location
"They're all very worthy and qualified people, but they're all of a type. I'm not aware there's anyone there who lives in the North," Member of Parliament John Mann said of the current coterie of U.K. policy makers. One of the stark conclusions from the geographical distribution of the votes in the June referendum to quit the European Union was just how wide the gap is between citizens of the capital city and the rest of the country.
No matter how hard the Bank of England works to be seen to be inclusive by visiting the rest of the country and having a team of agents speaking to businesses and consumers in the regions, it's hard to shake the accusation that it belongs to a metropolitan elite out of touch with the concerns in a Welsh village or a Scottish shipyard. Why not have a member who works from Sheffield or Aberystwyth, and commutes to London when necessary?
Brexit Means Brexit
Governor Mark Carney has warned that it would be wrong to assume every member of the MPC voted to stay in the EU. I’d still happily wager a fiver that all nine were opposed to Brexit. It would help counter the accusations (unfounded, in my view) of pro-European Union bias at the bank if the next member was an advocate of an EU departure; it might also improve communications with the government committee that will handle the divorce negotiations in the coming years.
Hire an Entrepreneur, Not an Economist
The advert says the successful candidate “will have an advanced understanding of economics.” I'd argue that professional economists are increasingly having to admit that even they don't really understand what makes economies tick. Given the amount of time the new deputy governor will be forced to spend in the company of other officials — “He or she will be a member of the Monetary Policy Committee, the Financial Policy Committee, the Prudential Regulation Committee, the Court of the Bank of England and will also represent the Bank on several international bodies,” the job description states — it might actually be more helpful if they are not a professional economist so they can resist groupthink and bring a different experience and viewpoint to the discussion.
I’ve argued before that the lack of businesspeople on monetary policy boards is a serious shortcoming. No-one understands the labor market and the economy quite like someone who’s built a business from scratch. Nothing focuses the mind quite like having to make payroll on a Friday. Conservative lawmaker Andrew Tyrie, who heads the Treasury Select Committee, said earlier this week in a discussion about central bankers that “their capacity to create a theology is virtually boundless.” He’s absolutely right. Given the newfound enthusiasm among central bankers for all things blockchain, perhaps a bitcoin entrepreneur is the ideal candidate.
The Common Touch
As well as having well-rounded and diverse personalities, monetary policy makers should empathize with the interests, desires and ambitions of their constituency. (Governor Mark Carney revealed under interrogation by a gang of schoolchildren in September that the culinary television program The Great British Bake Off is his guilty pleasure.) The next deputy governor doesn't need to be a fan of fondant fancies and three-dimensional gingerbread structures, but being aware of cultural context doesn't hurt.
At this point, it would be nice if I could at least come up with a shortlist of candidates for consideration. Unfortunately, the world of business and finance remains a white male bastion; only seven of the U.K.'s 100 biggest businesses, for example, are run by women (see what I mean about the glass ceiling still being firmly in place?). I’m at a bit of a loss. But if you know anyone who fits the bill, the Cabinet Office is taking applications until midday Nov. 21.
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