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Does the Old Lady need an economist or an ex-banker?

The Financial Times says Alastair Darling and Mervyn King are at odds over who should be the next deputy governor of the Bank of England.

Darling's said to want someone with a City background, who can restore the Bank's damaged reputation in the wake of Northern Rock.

King, a former professor at the London School of Economics, is said to prefer someone in his own image, and is calling for the appointment of a deputy with a professional background in monetary policy.

Rising inflation and problems at leading banks like RBS and Bradford & Bingley make the appointment an important one. So who's best placed to strengthen the Old Lady at this juncture - a practitioner or a theoretician? Share your thoughts below.

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AUTHOReFinancialCareers UK Insider Comment
  • an
    anon
    6 June 2008

    The government, BofE are losing creditbility rapidy for even suggesting city bankers should work at the BofE. Darling is brain dead..when are the elections?

  • VV
    VV
    5 June 2008

    If london wants to keep his position of european capital for financial services, than it may need to join the euro since the weak sterling is a huge problem and at the moment I dont see how the sterling can strenghten against euro... it is probable to expect a further decrease of the sterling mainly because of strong continental european exports... also, the UK has sold a lot of monarchy's gold just few years ago, to buy US dollars... can you figure out how much big losses they've got! I hope the UK will join euro. Regarding the BoE governor, honestly I dont understand how he could have stoped the drop in house prices and the consequent bail out of some USA-UK banks... what is happening now is the negative side of speculation. with speculation you can make profit or losses, and this is the time of losses...

  • KD
    KD
    4 June 2008

    Mervyn King did what he could, acting fully within the scope he was allowed. Mervyn has been brilliant and so has Charles Bean. The have records that demonstrate this over a long period.

    Both are not only academics but also able to apply themselves practically. The record shows that they, with charles Goodhart, predicted the 1987 crash and made money for LSE Ltd. King also warned against CDOs well before the problem took place.

    The mandate of the BoE does not include acting like an investment, merchant or retail bank.

  • an
    anon
    4 June 2008

    As someone working in the City in Investment Research and having studied economics at university, my opinion is that employing an ex-banker could create biases and potential conflicts of interests at the BankOfEngland. The BofE mandate is to control inflation and not as a get of jail card for badly run banks like Northern Rock. Northern Rock deserves to go down and let this be a lesson learnt. If some bankers are fired as a result of the credit crunch, so be it..they deserve to go for the years of over indulgence, sheer stupidity and excessive greed. The best people to control the economy are elite economist and not fat cat ex bankers who cannot even run their own firm, let alone the UK Economy.

  • Ra
    Ranting Rog
    3 June 2008

    The real point is that monetary stability is also about liquidity risk and the Bank of England isn't going to have a hope in hell of getting its head around this unless it appoints someone with more than a passing knowledge of financial markets.

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