Who is the right person to become the next governor of the Bank of England?

A dark horse appears to be emerging in the race to replace Sir Mervyn King as the governor of the Bank of England:  Andrew Haldane.

Regular readers are very familiar with Mr. Haldane and his work as your humble blogger frequently cites his insightful analysis.  So make no mistake, I think he would be an excellent choice.  If he has applied for the job, he is probably the best choice from the existing applicant pool.

However, would he be the best choice to be governor of the Bank of England for the next 8 years is an entirely different question.

From my perspective, the issues facing the next governor are:

• Ending the bank solvency led financial crisis;
• Leading the efforts to establish the financial reforms that will, like the reforms adopted after the Great Depression, create a multi-generation period of financial stability;
• Taking the financial markets off of all the life support programs put in place since the beginning of the financial crisis; and
• Moving from quantitative easing and zero interest rates to monetary policy that typifies a growing economy (this includes shrinking the Bank of England's balance sheet).

Given these issues, what is the ideal background that the next governor should have?

The number one requirement for the ideal background would be that the individual predicted the financial crisis.  I like to think that if someone can predict an event it is an indication that they have some insight into the cause of the event.  This will be very useful if the issues are going to be successfully addressed.

There is actually someone who is very similar to Mr. Haldane in terms of experience as an economist at a "central" bank and who shares the same outspokenness.  He also happens to have predicted the financial crisis.  His name is William White.

For those who have not read Liam Halligan's Telegraph column explaining why Mr. Haldane is the right person for the job, I recommend it.