Britain favours credentials over countrymen for BoE's top job
NEW YORK |
NEW YORK (Reuters) - Britain's choice of a Canadian to run the Bank of England could usher central bankers into the realm of globe-trotting elites that dominate the top jobs in business and sports.
When Bank of Canada Governor Mark Carney takes over the Bank's next summer, as announced Monday, it will be the first time a foreigner has held the top position at a major national central bank.
Britons are used to not worrying about nationality and embracing professional credentials instead, allowing foreigners to run their national football teams as well as top companies.
The British central bank was already trend-setter in welcoming outsiders in its ranks. Americans DeAnne Julius and, until this year, Adam Posen, served as members of the Bank of England's decision-making Monetary Policy Committee.
By contrast, few Americans could imagine the U.S. president nominating a Briton to even sit on the Board of Governors of the Federal Reserve, much less run it.
But as the world of finance becomes increasingly globalized, appointments like Carney's could become less unusual, some say.
"We don't think twice about having the best surgeon or the best engineer or the best mathematician. Having the best central banker is not a bad idea," said Kim Schoenholtz, director of the Center for Global Economy and Business at New York University, and a former chief economist at Citigroup.
"This is a professionalization of the craft of central banking."
In explaining the surprising decision, Chancellor of the Exchequer George Osborne stressed Carney's "fresh perspective" and called him "the very best" choice for the job, before nodding to potential concerns about loyalty.
"As a Canadian Citizen, is subject to Her Majesty the Queen," Osborne said, adding that, though it is not required, he will apply for British citizenship.
Even so, Carney may feel out of place in the Bank of England's grandiose "parlours," or being accompanied through its marble halls by "pinks" - the bank's iconic doormen who still wear top hats and pink tailcoats.
A ‘MIRROR OF MULTINATIONALS'
It is not uncommon for governments to trust non-citizens in matters of national importance.
The Papal Swiss Guards, once leased out by their government as mercenaries, still protect the Vatican, and the French Foreign Legion is composed mostly of non-French volunteers who fight for a country that is not their own.
Countries welcome promising Olympic athletes from abroad to compete on their behalf, and businesses with strong ties to their homeland look for leaders beyond their borders.
In one of countless examples of the private sector importing top executives, Anshu Jain, a British citizen of Indian descent, recently became the head of Deutsche Bank. At the time, Jain did not speak German.
But the protection of the money in people's pockets has been considered, at least until now, largely a national affair.
Carney runs the risk of attracting jingoistic criticism if the struggling British economy fails to gain momentum in the years to come.
"In that sense, he will be restricted," said Edwin Truman, senior fellow at the Peterson Institute for International Economics, and a former director of the Federal Reserve Board's international finance division.
"Will he be more or less inclined to clash with the Parliament and government on fiscal policy?" Truman said. "I would think he would do less of that."
Peter Spiro, a citizenship law expert and professor at Temple University, said the traditional sense of national loyalty was being tested as business and finance goes global, and so does the expertise required to regulate it.
"Those questions have mostly been taken over by globalization," he said, adding that Carney's selection is "a mirror of what's going on in the context of multinationals."
(Reporting by Atossa Araxia Abrahamian and Jonathan Spicer; Editing by Jackie Frank)
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