Shakeup at
central bank means governor Mark Carney now has four deputies
 |
| Nemat Shafik, new deputy governor of the Bank of England. Photograph: Francois Lenoir/Reuters |
Chancellor George Osborne has appointed a respected female economist as a Bank of England deputy governor, ending four years of an all-male interest-rate setting committee.
The
appointment of Nemat Shafik, a deputy managing director of the International Monetary
Fund, was one of three senior officials announced on Tuesday as part of a
radical shakeup at the Bank under governor Mark Carney. Ben Broadbent, already
on the monetary policy committee, will take over as a deputy governor from
Charlie Bean when he retires this summer. City grandee Anthony Habgood becomes
chairman of court at Threadneedle Street, managing the Bank's affairs other
than monetary policy.
The
appointment of Egyptian-born Shafik, who is also a British and US national,
follows growing criticism of Osborne's failure to appoint a woman to the MPC.
The nine-member committee, which meets monthly to set interest rates under the
chairmanship of Carney, has been without a female member since Kate Barker left
in May 2010.
Shafik's
post is a new role at the Bank – deputy governor responsible for markets and
banking. It means Carney now has four deputies. Her appointment, effective from
August, comes as the Bank fights to shore up its credibility amid a worldwide
probe into alleged rigging of foreign exchange markets. The 51-year-old was
just 36 when she became the youngest ever vice president at the World Bank. In
her new role at Threadneedle Street she will represent the Bank in meetings
with other central banks, the IMF and other institutions, and will sit on the
BoE's financial policy committee and court of directors. She will take the
place of Paul Fisher on the MPC when his term ends in June.
Carney, who
is pushing through a shakeup of the Bank's structure, welcomed the three new
appointments.
"With
a diverse combination of skills and experience, these appointments result in a
well-rounded senior management team at the Bank – one that will set the
direction for an ambitious agenda of transformation for the institution and
enable it to meet the challenges and opportunities it faces in maintaining
monetary and financial stability," he said in a statement.
The Bank
said that Shafik would be responsible for reshaping its operations and balance
sheet, including "ensuring robust risk management practices". She
will also help develop and implement "an eventual exit" from
quantitative easing, whereby the Bank pumped billions in electronic cash into
the flagging economy during the downturn.
Habgood,
who is chairman of Whitbread, takes over as chair of the Bank's court of
directors from David Lees, who leaves at the end of June.
As the new
deputy governor for monetary policy, Broadbent will be responsible for the
Bank's analysis of the UK and international economies that feeds into interest
rate decisions. He takes on the post at a turning point in the cycle for
borrowing costs. After five years at a record low of 0.5% interest rates are
expected to start rising again in 2015, albeit gradually, as the economic
recovery gathers steam.
Announcing
the appointment, Osborne said: "I am delighted to announce the appointment
of three such highly qualified and experienced people to join the Bank's
already excellent executive team. Their impressive experience of business,
economics and international finance will strengthen and diversify the Bank's
top team and enable them to continue to face Britain's ongoing economic
challenges from a position of strength."
In further
changes, Spencer Dale, currently an MPC member and the Bank's chief economist,
will become executive director for financial stability, joining the financial
policy committee. He effectively swaps roles with Andy Haldane, currently
executive director for financial stability, who becomes chief economist and
joins the MPC.
Changes to
the MPC will give market players plenty to think about as they seek to predict
when the first move in interest rates will come.
David
Tinsley, economist at BNP Paribas bank in London, said: "What does all
this mean for the direction of policy? Well the truth is it is hard to know,
but it certainly adds a degree of raised uncertainty as to how the debate on
the MPC will go from the second half of this year, when most of the changes
occur."
"In
Paul Fisher's departure the MPC is clearly losing a 'dove'. But in Dale's move
off the MPC it is also losing a 'hawk'. At the same time Nemat Shafik's views
will be an unknown quantity for a while (she may hug the consensus until she
feels more up to speed with the UK conjuncture). Andy Haldane has a reputation
as a 'free thinker'. How this translates into his views on monetary policy are
not clear."
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