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Portfolio > Economy & Markets

Few Apply for Top BoE Spot

By Marlene Y. Satter

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The list of candidates to succeed Mervyn King as governor of the Bank of England is smaller than expected, with many potential candidates disqualified because of recent investigations into bank misdeeds, and two of the top contenders off the list by their own choice. Jim O’Neill, chairman of Goldman Sachs Asset Management, and Gus O’Donnell, former head of the U.K. civil service, have both declined to apply.

Bloomberg reported Monday that with the two out of the running, the field of candidates is narrower than expected. Those interested in the top job at Britain’s central bank had until 8:30 Monday morning to submit a resume, a cover letter and a questionnaire that reveals any earlier political activity and possible areas where conflicts of interest may arise.

Speculation had been rife that the Goldman chief would toss his hat in the ring, but O’Neill has said he has not applied for the job. Neither has O’Donnell, who was listed just last week by bookmaker William Hill as third favorite to succeed King on his departure from the BoE in June, with odds of 5–1.

Among those who have applied are Bank of England Deputy Governor Paul Tucker, the favorite with odds of 6-4, Financial Services Authority Chairman Adair Turner (5–2) and Independent Commission on Banking Chairman John Vickers (9–1). Also among the top runners is Bank of Canada Governor Mark Carney (9–4).

“Tucker is the best qualified,” according to Shamik Dhar, a former Bank of England economist and head of investment strategy at Aviva Investors, who was quoted in the report saying, “If this wasn’t a quasi-political appointment, he’d get it.”

Dar added that because the government wants to look tough on the financial industry, Vickers could be in line for the slot with his experience in financial regulation. Former BoE chief economist Vickers, now a professor at Oxford University, was named by the British government in June 2010 to head up the Independent Commission on Banking.

A Vickers appointment, said Dhar, “would scare the banks sufficiently, a way for the government of saying ‘we’re serious about banking reform, but we’re not downright out to get you.’” Dhar’s tenure at the BoE was during Vickers’ term as chief economist. He added, “From that perspective, Vickers fits the bill. The question is, does he have the authority to run a large institution?”

Candidates will be put on a short list by an official panel, and those who haven’t made the cut will be notified. The panel will then carry out interviews and make its recommendation to Osborne; his Liberal Democrat coalition partners will also have input. A decision is expected by the end of the year.

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