Central bankers rarely have it easy. They always do too much or too little depending on your outlook.
If there's one man who escaped that hell without even getting charred, it's Andy Haldane. This is no mean feat. The former chief economist of the Bank of England spent 32 years within the walls of the Old Lady.
If reports are to be believed, he would have been the favorite for governor among some politicians had Labor won in 2019. Traditional left-wing parties have been courting a number of private equity and banking executives in recent months. A new brand for the city.
Haldane predicts there will be a “stagnation” in policy this year due to elections. But if he has pinned his political stripes to one of the two major parties, he is careful not to show it. His tie is also a neutral green.
He is clear that City is key to Britain's future growth. “There is still much more that both sides can do to support financial and professional services to their full potential,” Haldane said. financial news. “There is no question that financial services and professional services are among the areas where we are globally competitive.”
Former colleagues at the bank have remained resolutely neutral on Brexit, one of the biggest issues affecting the sector. But it was on this topic that Haldane first hinted at partisanship.
“As Labor says, can we do more within Europe? I hope the answer is yes.”
Mr Haldane, who was born in working-class Sunderland and educated in Guiseley, Leeds, was not always a banker in the city. He warned that bonuses were unaffordable before the financial crisis. He told a panel organized by the protest group in 2012 that the Occupy movement's “loud and convincing” voice sparked valuable discussion about inequality.
Unions have condemned the regulator's decision to remove caps on banker bonuses in October as a return to the “greed is good” culture of the pre-crisis era. But Haldane isn't too worried about the move.
“When I was at the bank, I felt like that was a laudable goal, but the execution wasn't strong enough,” he says. “As a result, more salaries are paid on a fixed salary, making them even less risk-sensitive. It makes sense to offer something paid and practical.”
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However, the man who was once branded “Mr. Boom'' shows no signs of letting go of his dovish status. Mr Haldane predicted that inflation could return to near the central bank's 2% target by Easter, and rate setters may “continue to fight the final war for a long time”.
“I'm by no means saying the battle has been won, but for me the risk the UK faces now, the bigger risk, is that we're going into recession rather than solving the problem of inflation.”
But worrying about toeing the line or obsessing over interest rates is no longer the all-consuming role for Haldane that it once was. Since becoming chief executive of the Royal Society of Arts think tank in 2021, he has been an intellectual force on everything from Leveling Up to Britain's industrial strategy.
“The bank has been very generous and let me have my say on all the issues. But part of the appeal of being outside is working full-time on some of the problems the UK needs to solve. That's true,” Haldane said. “Our bank doesn't build bridges, roads, or broadband. I'll always be a public servant, and I'm always drawn to the issues that I think are most important.”
Since his departure, the bank has had to weather the fallout from Brexit, Covid-19 and wars around the world.
Domestically, there is also an ongoing battle with increasingly assertive policy makers. Its regulatory arm, the Prudential Regulation Authority, has been given new targets for growth and global competitiveness in a bid to reinvigorate London's moribund capital markets environment.
The bank is also investigating areas such as AI and cybercrime to respond to emerging threats. Another major risk is highly leveraged private market companies.
“My former colleagues are right to be extra cautious,” Haldane said.
But he said policymakers may have overlooked something: If the work-from-home revolution moves too quickly, financial services skills and talent could shrink. “All of my learning came through conversations with someone who said, ‘I have a stupid question…’ I think a lot of that is lost by working in the bedroom.”
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Haldane warns that the “social contract” of building trust and relationships and understanding colleagues and customers can be undermined, and “meetings are essential for this.”
A techno-optimist at heart, he is bullish that AI could help address this learning gap. This is particularly true for the education of young people from disadvantaged backgrounds. “Financial services and professional services didn’t start off in a very good way in terms of socio-economic diversity…I think that’s going to bring great wealth to the city and lead the way,” he said. To tell.
He is also bullish on the possibility of banks issuing their own interest-paying digital currency, saying he is “blinded” by the UK's outdated technology-enabled payments infrastructure.
“Banks can't afford not to take an active interest in this,” he says. “I said 10 years ago that it was only a matter of time before banks would issue something like that.”
Like his speech at the Bank of England, it's impossible not to be thought-provoking. How well his former colleagues listen to his words could shape City for years to come.
resume
to be born
August 1967
education
1985-1988
BA in Economics, University of Sheffield
1988-1989
MSc Economics, University of Warwick
career
2023-present
AMRC Training Center Industry Committee Chairman
2021-present
RSA CEO
2023
Ministry of Finance Economic Advisory Council
1989 to 2021
Various roles of the Bank of England:
2014-21
chief economist
2009-14
Executive Director, Financial Stability
2005-8
Head of Systemic Risk
2003-5
Market Infrastructure Manager
1998-2003
Director of International Finance
1989-1998
Monetary Policy Manager and Economist
To contact the author of this article with feedback or news, email Justin Cash.
