A jogger runs past a businessman as he walks past the Bank of England. (Photographer: Simon Dawson/Bloomberg)

Bank of England Vacancy Provides Chance to Tackle Gender Problem

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(Bloomberg) -- The Bank of England may get help tackling its diversity problem this summer.

The departure of Ian McCafferty in August opens up the first slot on the Monetary Policy Committee in a year and gives the U.K. government, which makes the appointments, the chance to name a woman to improve the gender balance among top officials. And then there is the question of who replaces BOE Governor Mark Carney, whose six-year term ends next June.

Silvana Tenreyro is currently the only woman on the nine-member MPC, and only the eighth to serve on the rate-setting panel in its 21-year history. By contrast, there have been 34 male appointments. The last three officials to leave the committee have also been women.

Lawmakers who scrutinize the BOE have bemoaned its gender imbalance. Chancellor of the Exchequer Philip Hammond has come under fire from the Treasury Committee for presiding over a lack of diversity, and in a heated session last year the MPC’s newest member, Dave Ramsden -- who replaced Charlotte Hogg -- was asked bluntly whether there were “no women capable of doing your job?”

He replied that there definitely were, before highlighting a wider imbalance in the field of economics. More than 70 percent of U.K. students accepted to study the subject at undergraduate level in 2015 were male, data compiled by the University of Bristol’s Economics Network show.

“Employers must actively search for the best possible candidates, including the Treasury as it seeks to fill the upcoming vacancy on the MPC,” said Conservative lawmaker Nicky Morgan, the first female chair of the Treasury Committee. “The Treasury cannot be complacent in tackling the lack of diversity on the Bank of England’s policy committees and at its most senior levels.”’

Gender questions come under the spotlight on Monday as the BOE hosts a conference in London with the European Central Bank and the Federal Reserve. Topics include the benefits of diversity and the factors that keep women from advancing their careers.

Women on the MPC

Since the BOE gained independence in 1997, just eight women have served on the MPC. They are:

  • DeAnne Julius - 1997 to 2001
  • Kate Barker - 2001 to 2010
  • Marian Bell - 2002 to 2005
  • Rachel Lomax - 2003 to 2008
  • Kristin Forbes - 2014 to 2017
  • Minouche Shafik - 2014 to 2017
  • Charlotte Hogg - 2017
  • Silvana Tenreyro - 2017 to present

One potential candidate to succeed McCafferty is Rain Newton-Smith. The former BOE employee is currently chief economist at the Confederation of British Industry -- a similar role to that held by McCafferty before his appointment -- and would therefore ensure a voice from the business world remains on the panel.

After the decision to keep interest rates unchanged last week, Newton-Smith said that “clear communication from the Bank of England will be important to help businesses and households plan for the future, and minimize uncertainty about changes in monetary policy.” Further rate increases remain a possibility, with strengthening wage growth a sign that domestic inflationary pressures are picking up, she said.

The Treasury could also look to academia. Tenreyro sits on the board of the Womens’ Committee of the Royal Economic Society, where her colleagues include Bristol University’s Sarah Smith, Grace Lordan from the London School of Economics, and the University of Warwick’s Kim Scharf.

Pay Gap

Sharon White, chief executive of communications regulator Ofcom, and Santander UK Plc Chairman Shriti Vadera were both mentioned in a Bloomberg survey on potential candidates to replace Carney, whose job is expected to be advertised over the summer.

The BOE reported a 21 percent mean gender-pay gap, reflecting a higher proportion of men in senior roles. Still, some progress on diversity has been made under Carney, who said that to took him “about five minutes” to notice the gender imbalance on his arrival in 2013. The proportion of women in senior management rose to 30 percent in 2017, up from 20 percent in 2014.

The BOE currently has a female chief operating officer in Joanna Place and recently promoted Victoria Cleland to the role of executive director for banking, payments and financial resilience. Cleland’s previous role as chief cashier will be taken by Sarah John on June 1 -- making her the third woman to hold the position.

As part of its attempts to boost the proportion of women at a senior level to 35 percent by 2020, from 30 percent currently, the central bank is piloting measures including anonymous job applications and a new program to encourage the return of any professionals who have been out of work for a period of time. To make its goal, the bank will need to increase its senior internal female promotion rate to about 50 percent, from 40 percent, Place has said.

©2018 Bloomberg L.P.

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