LONDON (Reuters) - Goldman Sachs’ Jim O‘Neill has been approached by Britain’s finance ministry as a possible candidate to be the next governor of the Bank of England, the Sunday Times reported.
O‘Neill, who coined the term ‘BRIC’ in 2001 to describe how the economic clout of Brazil, Russia, India and China would challenge the West’s economic dominance, refused to comment when asked about the report, which did not cite its sources.
The paper said officials from the Treasury, as Britain’s finance ministry is known, had made the approach several months ago.
“No comment. Sorry,” O‘Neill told Reuters.
A spokesman for the Treasury also declined to comment, referring to a statement by finance minister George Osborne last week that the search for a new Bank of England chief would not start in earnest until later in the year. Governor Mervyn King is due to retire in June 2013.
Described by the Sunday Times as a surprise candidate, O‘Neill combines a distinguished pedigree as one of the world’s most famous economists with over a decade of experience at the world’s most powerful investment bank, Goldman Sachs.
In his current post as chairman of Goldman Sachs Asset Management, O‘Neill helps oversee $714.6 billion in management.
The ultimate decision on who will replace King to help guide Britain’s $2.5 trillion economy, which has fallen into its second recession since the financial crisis, lies with Osborne and Prime Minister David Cameron.
“The Governor still has a quarter of his term to serve and he is doing an excellent job,” Osborne told reporters in Washington last week. “When the time comes, the best person for the job will be appointed, whoever he or she may be.”
Deputy BoE Governor Paul Tucker, former civil servant Gus O‘Donnell and Financial Services Authority Chairman Adair Turner have also been tipped as potential successors to King.
Even Bank of Canada Governor Mark Carney, who also once worked at Goldman Sachs, has been cited as a possible governor to take over from King, 64, who detractors say reacted too slowly to the global financial crisis.
The decision on a governor is complicated by proposals to increase the power of the Bank of England, founded in 1694. They are yet to be finally approved by parliament, but would give the bank sweeping new powers over the financial system and Britain’s banks to help protect Britain from another crisis.
That will extend the next governor’s job way beyond managing monetary policy to the complexities of banking regulation.
Banking knowledge will be needed but amid popular anger against bankers and their bonuses, O‘Neill’s links to Goldman could be problematic for Osborne.
However, O‘Neill, 55, cuts a rather different figure to the popular image of a voracious investment banker.
The son of a postman, he went to a state school, rather than a prestigious fee-paying school like Osborne and Cameron, and retains a Mancunian accent from his childhood in Britain’s northern city of Manchester. He once tried to buy Manchester United football club.
In a research paper on April 20, five days before data showed Britain had slipped into recession, O‘Neill said the UK economy was in better shape than official reports suggested.
“I suspect again that the UK economy is stronger than many believe and certainly than much of the official data is suggesting,” O‘Neill wrote.
Additional reporting by David Milliken; Editing by Susan Fenton