Rajan wants to focus on academics, not inclined to apply for Bank of England's Governorship

Last Updated: Thu, May 17, 2018 14:46 hrs
Raghuram Rajan

London: Raghuram Rajan will not be the next Governor of the Bank of England. The former Governor of the Reserve Bank of India, himself cleared the speculation.

Rajan said that he had not applied for the job as the Governor of Bank of England, because he was satisfied as an academic.

Rajan acknowledged reporters at a US Booth School of Business' event in London saying, "I have a very good job at the University of Chicago and I actually am an academic, not a professional central banker. I am very happy where I am."

Rajan further added, "I think I've said all I can say. I'm not going to apply for a job anywhere, absolutely."

Previously, media reports speculated that Rajan may get considered for the top job after Mark Carney, the current Governor and former Governor of the Canadian Central Bank, steps down in June 2019.

The author of 'I do what I do' and 'Fault Lines: How Hidden Fractures still threaten the world economy' maintained his academic stance. Rajan, the former chief economist at the International Monetary Fund, had also warned of financial imbalances in the run-up to the 2007-08 global crisis. At the moment, he serves as the University of Chicago as a professor of Finance.

British finance minister Philip Hammond is the head of a search committee looking for Carney's successor, and during an event in Washington, he had said that the agency would consider foreign candidates.

Among the front-runners for the coveted post were Andrew Bailey, a former deputy governor at Bank of England. Bailey currently heads Britain's Financial Conduct Authority. Others also include Agustin Carstens, the GM for the Bank of International Settlements. The list also includes names such as Minouche Shafik, a former BoE deputy governor. Shafik heads the London School of Economics.

There is also speculation that Ms. Shriti Vadera, the chairperson for Santander UK, could be considered for the role.

Reuters carried a report of the event. The report explained, Rajan as saying that banks were much safer now but risk had shifted to other parts of the financial system.

Speaking about the debt troubles in Argentina, he felt these were likely to be repeated elsewhere. He also highlighted the increased volume of 'covenant-lite' loans compared with before the crisis.

Rajan added that the US Federal Reserve and the European Central Bank had probably done too much in the way of asset purchases once the worst of the crisis had passed, and had let governments off the hook in terms of undertaking structural reform and providing fiscal stimulus.

In the ECB's case, asset purchases appeared to have weakened the euro but not boosted real economic activity.