Former Reserve Bank of India Governor Raghuram Rajan is one of the top contenders for the job of Bank of England Governor when incumbent Mark Carney’s term ends next year, according to a report in the Financial Times.
This is at least the second time that Rajan’s name has been mentioned as a candidate for a top central bank. In October, financial magazine Barron’s had said Rajan would be the ideal choice to chair the US Federal Reserve, a job that eventually went to Jerome Powell.
Financial Times said in the article on Sunday that attracting Rajan would be a “coup” for Bank of England.
In its 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’s Booth School of Business would bring with him "impeccable international economics and central banking experience" as well as "significant achievements at the Reserve Bank of India".
The con, in its view, is that he has thus far shown "no indication that he would want the job at the BoE".
On the newspaper's list of prospective candidates is another Indian-origin contender in Shriti Vadera, the chair of Santander UK and a former UK government business minister. The treasury is expected to advertise the post by July this year, a year before a new incumbent as the Bank of England chief is due to take charge.
The article said that UK’s Chancellor of the Exchequer Philip Hammond is starting the process to select the next governor of the BoE to replace Canada-born Carney in 2019.
Hammond has already said he has begun looking for candidates in forums such as the International Monetary Fund spring meetings in Washington.
Rajan’s career has been global. He worked as chief economist at the International Monetary Fund from October 2003 to December 2006 – the first non-westerner to be chief economist and director of research at the IMF.
Rajan went back to academia after a three-year term as RBI governor in 2016, when the Narendra Modi government failed to give him an extension.
Rajan shot to prominence on the global stage in 2008 when the US sub-prime crisis started unravelling. Three years earlier, speaking at the US Federal Reserve’s annual Jackson Hole conference, he had warned about growing risks to financial system and called for putting in place policies to mitigate these risks.