London: India’s former Governor of Reserve Bank of India (RBI) Raghuram Rajan has delivered some uncomfortable economic truths in a career spanning the International Monetary Fund and powerful positions in his native India. The question is whether Brexit Britain is ready to hear them from another foreign Bank of England governor.
The job of stewarding the U.K.’s monetary policy and maintaining its financial stability has rarely been more political, and Rajan is the only outsider among the top contenders in the running to replace Mark Carney, according to bookmakers and economists who follow the 325-year-old institution.
Carney’s tenure has been overshadowed by the convulsions over Brexit, with some hard liners in the governing Conservatives accusing the Canadian of exaggerating the economic pain and underplaying the benefits of leaving the European Union. As the party chooses a new leader following the resignation of Prime Minister Theresa May, her potential successors have vowed to deliver Brexit, and the latest deadline is Oct. 31.
Rajan has made sympathetic noises toward the U.K.’s dilemma,particularly the disillusionment parts of the country that fueled the Brexit vote. He told the Times newspaper in March, though, that success depends on the U.K. reengaging with the world.
That would start with his appointment, according to David Blanch flower, an economics professor at Dartmouth College and a former Bank of England policy maker. The other top candidates for the job, including front-runner Andrew Bailey, already work at the bank or financial regulator.
“It’s a pretty unimpressive bunch, with Rajan sitting head and shoulders above the rest of them,” Blanchflower said. “The problem is, why would anybody want to put themselves in the position of having to deal with Brexit?”
Rajan, 56, a professor at the Chicago Booth School of Business, is yet to comment on his candidacy when contacted by Bloomberg, as did the Bank of England.
The U.K. Treasury, which is responsible for hiring the next governor, declined to comment on who had applied by last week’s deadline. Chancellor of the Exchequer Philip Hammond has stressed the need to look internationally for the next appointment, though it’s not clear if he will still be in his job when the decision is made.