Raghuram Rajan, the former governor of Reserve Bank of India (RBI), has been named as one of the contenders to head Bank of England. The current governor Canada-born Mark Carney is set to step down at the end of his term in June 2019. Carney became first outsider to take the role in 2013, after three centuries. Raghuram Rajan is currently working as the Katherine Dusak Miller Distinguished Service Professor of Finance at the Booth School of Business, University of Chicago.
Other five names in the race include Andrew Bailey, chief executive of the Financial Conduct Authority, Minouche Shafik, director of the London School of Economics Shriti Vadera, chair of Santander UK, Ben Broadbent, deputy governor for monetary policy and Andy Haldane chief economist at Bank of England.
The Financial Times stated in a report that “Attracting Raghuram Rajan, the highly respected Chicago-based economist and former Reserve Bank of India governor, would be a coup, as would securing Agustín Carstens, Mexico’s central bank chief and the new general manager of the Bank of International Settlements. Mr Carstens is an intellectual heavyweight in the central banker community,”
Raghuram Rajan has many feathers in his cap that may work in his favour ranging from his vast experience in international economics to heading a central bank. Philip Hammond, UK chancellor, will soon start the process to select the next BoE governor.
Raghuram Rajan, was the youngest to become the chief economist at the International Monetary Fund. He became famous after he predicted a financial crisis in the US in 2005. Rajan was appointed RBI Governor in 2013 but he was not offered an extension by the current BJP-led government.
Raghuram Rajan has been quite vocal and has openly criticised initiatives which he doesn’t support. Recently, Rajan said that demonetisation was not a good idea and was not a well-planned and well thought-out exercise, while addressing students of Harvard Kennedy School. He said, “We (the RBI) were consulted. We felt it was not a good idea, and told the government. It seemed to me people will find a way around it.”