Raghuram Rajan to be Governor of Bank of England? Ex RBI guv takes a final call and this is it
Raghuram Rajan said he has a very good job at the University of Chicago and he is actually an academic, not a professional central banker. I am very happy where I am, he said.
When the initial reports first appeared, they grabbed a lot of attention. The possibility was enthralling, even rivetting. However, it is all slated to remain in the realm of possibilities only. Putting to rest all the rumours, the man himself, Raghuram Rajan, former governor of Reserve Bank of India, finally made it clear he did not intend to apply for the job of Bank of England governor, which is due to fall vacant next year. A report in Financial Times recently included his name as one of the leading contenders to bag the top job at BoE after existing governor Mark Carney steps down at the end of June 2019.
“I have a very good job at the University of Chicago and I actually am an academic, not a professional central banker. I am very happy where I am,” Rajan told reporters after an event in London hosted by the US university’s Booth School of Business, where he is a professor of finance.
“I think I’ve said all I can say. I’m not going to apply for a job anywhere, absolutely.”
Asked what he would do if he were approached to fill the role, Rajan - who was the RBI governor until September 2016 - said he had answered a similar question.
British finance minister Philip Hammond is expected to name Carney’s successor later this year, and said in Washington last month that he would consider candidates from abroad.
Other potential foreign candidates include former BoE deputy governor Andrew Bailey, a former Mexican central bank chief Agustin Carstens, and BOE Deputy Governors Ben Broadbent and Dave Ramsden
Raghuram Rajan is a former chief economist at the International Monetary Fund, and notably warned of financial imbalances in the run-up to the 2007-08 global crisis.
In the event, he also said that banks were now much safer but risk had shifted to other parts of the financial system.
Debt troubles in Argentina were likely to be repeated elsewhere and he highlighted the increased volume of ‘covenant-lite’ loans compared with before the crisis.
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The US Federal Reserve and the European Central Bank had probably done too much in the way of asset purchases once the worst of the crisis had passed, Rajan added, and had let governments off the hook in terms of undertaking structural reform and providing fiscal stimulus.
In the ECB’s case, asset purchases appeared to have weakened the euro but not boosted real economic activity.
He declined to comment on whether the BoE’s 435 billion pound ($587 billion) asset purchases were too much, or if Britain’s fiscal austerity since 2010 had been excessive, as he had not studied the British economy in as much depth, reported Reuters.
(With inputs from Reuters)