Former RBI governor Raghuram Rajan to be the next chief of Bank of England?
London, April 24: Well, it's a clear case of India's loss, the United Kingdom's or UK's gain. Even more than a year after former Reserve Bank of India (RBI) governor Raghuram Rajan retired from his coveted post and went back to the United States of American (USA) to teach in 2016; every now and then India misses his apt handling of the country's economy in the face of all adversity.
Now, reports stated that Rajan may be among some of the world's leading economists in the running for the post of Bank of England (BoE) governor as the UK government hunts for a candidate to take charge from next year.
Canada-born Mark Carney, the current governor of England's central bank, is set to step down at the end of his term in June 2019. He had become the first foreigner in the post in three centuries when he took up the role in 2013. UK Chancellor Philip Hammond has now indicated that his global hunt for Carney's successor is ongoing, indicating the next governor could well be a foreigner too.
Attracting Rajan, the highly-respected Chicago-based economist and former RBI governor, would be a coup," writes The Financial Times. In its own analysis of the pros and cons of 55-year-old Rajan's candidacy for the post, the newspaper notes that the Katherine Dusak Miller Distinguished Service Professor of Finance at the University of Chicago Booth School of Business would bring with him "impeccable international economics and central banking experience" as well as "significant achievements at the RBI".
The con, in its view, would be that he has thus far shown "no indication that he would want the job at the BoE". On the list of the newspapers of prospective candidates is another Indian-origin contender in Shriti Vadera, the chair of Santander UK and a former UK government business minister.
"Having been a key government figure in the financial crisis, Baroness Vadera is also credited with doing a good job in chairing a committee of City [of London] grandees, and later in helping to frame the UK's position on Brexit and financial services," the newspaper notes.
The UK's Treasury department wants an open competition for the post and is seeking applications from well-qualified candidates from around the world.
"The formal process has not yet started but I, and many other people I am sure, may have cast their eye around various rooms to see if any likely looking candidates hove into view," Hammond told reporters on the sidelines of an International Monetary Fund (IMF) meeting in Washington recently.
The Treasury is expected to advertise the post by July this year, a year before a new incumbent as the BoE chief is due to take charge.
After the Narendra Modi government came to power in 2014, the relationship between the former RBI governor and the Centre was always a matter of discussion. While Rajan never openly accused the Centre of interfering with his work or curtailing his power, on many occasions he spoke against the political climate of the country after the Modi government took charge.
It is also widely believed that Rajan, who was likely to have a second term as the RBI governor, did not stay back after the end of his first term, because the government wanted to introduce demonetisation of high-value currency notes in November 2016. Insiders say Rajan was opposed to demonetisation.
Recently, Rajan said that demonetisation was not a well-planned or well-thought-out useful exercise.
"Demonetisation I think was not a well-planned, well thought-out useful exercise. And I told the government that when the idea was first mooted. It seemed to me that people would find their way around," Rajan said at the Harvard Kennedy School in Cambridge recently.