The British government will pick a replacement for Bank of England Governor Mervyn King by the end of the year, seeking a central bank chief whose powers will stretch from healing the economy to policing the banks.
Formally advertised for the first time, the post calls for “a person of undisputed integrity and standing” – a sign that any commercial bankers tainted by this year’s market rate-setting scandal need not apply.
Financial Services Authority chairman Adair Turner, Britain’s former top civil servant Gus O’Donnell and BoE deputy governor Paul Tucker have been touted as potential replacements for Mr. King, who is due to step down next year.
While Mr. Tucker – once Mr. King’s heir apparent – has been criticized for not spotting earlier the Libor scandal over banks rigging market rates, he could still be in the running for a job which takes on new powers for financial regulation and stability next year.
Many of the favourites to replace Mr. King have at least some flaws in their resumés because of their connections to regulation, policy making or commercial banking during the global credit crunch which ravaged Britain’s economy and financial services sector.
“The appointment ... will be conducted through a fair and open competition. For the first time in history the post will be advertised,” Finance Minister George Osborne told Parliament on Tuesday.
“As with Mervyn King, we are seeking a governor of intelligence, independence, and integrity. We intend to announce the successful candidate by the end of the year.”
Some respected figures from the world of commercial banking, such as former Barclays chief executive John Varley, have also been mooted as possible candidates.
Treasury officials say Mr. Osborne is keen to hear from as wide a field of applicants as possible, indicating that a foreign national could be considered.
Bank of Canada Governor Mark Carney has ruled himself out, after rumours about his candidacy kept popping up.
The Treasury’s advertisement for the job, to be published in Friday’s Economist, demands an ability to inspire “confidence and credibility both within the Bank and throughout financial markets” as well as experience of working with a central bank or at a senior level in commercial banking.
Mr. King is due to step down as governor on June 30, 2013, after two five-year terms in office. His successor will serve a single eight-year term and take on greater responsibility for keeping the financial system stable and regulating banks, as well as managing inflation and the economy through monetary policy.
The new governor will face the £375-billion ($602-billion U.S.) question of when and how to start unwinding the BoE’s unprecedented money printing program, intended to breathe life back into a stagnant British economy.
The appointment will be made by Queen Elizabeth on the recommendation of Mr. Osborne and Prime Minister David Cameron.
Officials from the Treasury and Bank of England will interview candidates after applications close on Oct. 8 and report back to Mr. Osborne. The successful applicant will face questions from parliament’s Treasury committee before taking up the appointment.
“The choice of the next governor is the most important public appointment the government will make,” said Conservative lawmaker Andrew Tyrie, chairman of the committee which scrutinizes economic policy.
A decision could come around the same time as the government’s autumn economic statement on Dec. 5.