Bernard Ginns: Feathers fly over Bank’s new Owl

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MEMBERS of the Monetary Policy Committee are usually pigeon-holed as doves or hawks according to their position on interest rates.

But when I quizzed the Bank of England’s new deputy governor on her stance, Minouche Shafik likened herself to a completely different type of bird.

She told me: “I asked my children this question and they said, ‘Mummy, you should say you’re an owl’. Look at the data, try and be wise.”

The remark had respectable economic commentators in a flap and led to them imagining a new era of MPC members identifying themselves with birds.

Alan Beattie of the Financial Times suggested: “With my eclectic approach to data, I’m a bit of a magpie.”

David Smith of The Sunday Times added: “I see myself as the robin of the committee, friendly and quietly chirping away in the corner.”

Others mentioned ostriches with their heads in sand or messy seagulls that left a mess for others to clean up.

The Times even commmissioned the veteran twitcher Derwent May to pen a piece on tawny owls to accompany its follow-up on The Yorkshire Post exclusive.

Ms Shafik made the comments during a visit to Yorkshire in her first interview since starting her new role on August 1. Given that the owl is the symbol of Leeds, it was a perfect choice.

Mr Shafik, who was formerly deputy managing director of the International Monetary Fund, has a number of responsibilities, including the design and execution of an eventual exit from the Bank of England’s £375bn quantitative easing programme.

I remember her predecessor Charlie Bean visiting Leeds in the summer of 2009 to try to explain the “unconventional” policy to Yorkshire business leaders.

The programme to buy mainly gilts - Government debt - was introduced to inject money into the economy to keep it afloat in the depths of the downturn.

Mr Bean faced questions from sceptics who were concerned that the Bank could end up bearing massive losses when it came to sell the assets. But he confidently predicted that the overall effect of the programme would “completely swamp any likely mark-to-market gains or losses”.

Five years on, those assets - equivalent to 27 per cent of UK GDP - are still sitting on the Bank’s balance sheet.

Asked when the BoE might start selling, Ms Shafik said: “It would make sense to wait until interest rates have gone up to a level where if we needed to change gear and loosen policy we could materially reduce them from that level.

“Only then does it make sense to begin to sell assets. The other key thing is when you do sell assets it is not something you want to be turning on and off; you want to have a clearly well-planned, orderly pre-announced programme of sales, which wouldn’t disrupt markets. But it’s still a way away.”

It’s speculation, but one option would be to hold onto them until maturity.

* Is something stirring at Yorkshire and Clydesdale banks?

The Australian-owned lenders have beefed up their senior management team with two big-hitting appointments.

First came the the unveiling of Jim Pettigrew as chairman of the board at the start of August; next came the hiring of Ian Smith as chief financial officer. Both are vastly experienced hands in financial services.

National Australia Bank unveiled plans to dispose of its US banking division last month, with new chief executive Andrew Thorburn, saying the move was in line with the group’s strategy to “focus on its core franchises in Australia and New Zealand”. He was reported by the Sydney press to have described the UK business as “a non-core asset”.

As well as bolstering its executive team, NAB has been investing significantly in digitising its UK operations banking operations and in new products.

Watch this space.