Britain shook up the Bank of England yesterday, appointing two new deputy governors, breaking the all-male grip at the top, and a chief economist who has been critical of the banking industry
International Monetary Fund official Nemat Shafik will become the first woman to have a top policy role at the BoE since 2010 as its new deputy governor for markets and banking.
Ben Broadbent, up until now an external member of the Bank’s Monetary Policy Committee, will step up to become deputy governor for monetary policy.
In a third move, Andy Haldane, the BoE’s executive director for financial stability, is swapping jobs with chief economist Spencer Dale, who will lose his MPC seat from the start of June. Dale had been seen as a favourite to become deputy governor.
Haldane has been unusually outspoken for a central banker, criticising banks for trying to dodge regulation and addressing anti-capitalism protesters.
The changes – made by BoE Governor Mark Carney and the British government – are part of an overhaul at the Bank that Carney is pursuing to break down barriers between its monetary policy and bank regulation wings.
One of the biggest losers from the upheaval is markets director Paul Fisher who will have to give up his MPC seat to Shafik from August 1.
Fisher has been under fire from lawmakers over the BoE’s handling of alleged manipulation of London’s foreign exchange market. “This shows the extent to which Mark Carney is reshaping the bank,” said Philip Shaw, chief economist at Investec.
“He’s serious about making reform, not only to the structure of the bank... but also in terms of its culture.”
Prior to yesterday’s announcement, Carney had overseen the appointment of outsiders to two other top positions at the Bank.
Broadbent was formerly a senior economist at Goldman Sachs – Carney’s employer before he became a central banker – and he will succeed Charlie Bean, who retires at the end of June.
Broadbent has said the failure of troubled banks to lend money to more efficient firms is one of the reasons behind Britain’s weak economic productivity since the financial crisis.
Shafik – who holds Egyptian, US and British nationality – has a background in development economics, working at the World Bank and as the top civil servant at Britain’s overseas aid department, before becoming deputy managing director at the IMF.
She oversaw much of the IMF’s work in the turnaround programs for Greece and Portugal. Shafik will be responsible for the BoE’s eventual exit from its quantitative easing policy – under which it amassed £375 billion of government bonds – as well as reviewing the way the central bank gathers intelligence on markets which has come under scrutiny recently after claims that London traders manipulated key foreign exchange rates.
Since taking office in July, Carney has been keen to increase the number of women in senior roles at the BoE.
BNP Paribas economist David Tinsley said the appointments were a surprise, and would add “a degree of raised uncertainty” about when the central bank would start to raise interest rates from their record low 0.5 per cent.
Little is known about Shafik or Haldane’s views on monetary policy. Broadbent and Dale both voted against the BoE’s final expansion of asset purchases in July 2012, while Fisher was part of a dovish minority under former governor Mervyn King who wanted more asset purchases up until King’s departure in June.
Broadbent is the first external member of the MPC to take up a position as deputy governor at the central bank.
He will be responsible for the BoE’s analysis of Britain’s economy, as well as bank notes.
Britain’s finance ministry also named Anthony Habgood as chairman of the BoE’s Court of Directors, which supervises the central bank. Habgood is chairman of brewer Whitbread and publishing company Reed Elsevier.