The UK Treasury named Megan Greene, global chief economist at the Kroll Institute, to serve on the panel setting interest rates at the Bank of England.
(Bloomberg) — The UK Treasury named Megan Greene, global chief economist at the Kroll Institute, to serve on the panel setting interest rates at the Bank of England.
Greene is replacing Silvana Tenreyro on the nine-member Monetary Policy Committee from July 5. She joins at a delicate time as officials weigh whether to continue the quickest series of rate increases in three decades.
Tenreyro is the committee’s arch-dove, resisting higher rates and in the past few weeks even setting out the case for reductions in borrowing costs while much of the rest of the panel led by Governor Andrew Bailey is warning further increases are possible.
“She brings significant experience from her work across financial services and academia and we will benefit greatly from her contributions to our policy discussions,” Bailey said in a statement released by the BOE.
Greene has previously suggested that she is concerned about the impact of tightening monetary policy on the banking system.
The MPC is finely balanced between doves, including Tenreyro and Swati Dhingra, arguing against further hikes and more hawkish policy makers, such as Catherine Mann.
“Megan Greene’s wide experience across financial markets and the real economy will bring valuable new expertise to the MPC,” Chancellor of the Exchequer Jeremy Hunt said in a statement Tuesday.
Greene, who is also a senior fellow at the Watson Institute for International and Public Affairs at Brown University, recently signaled her concerns about the impact tightening monetary policy is having on the banking system in a possible hint of her views on the current central bank debate.
“We will keep hitting pockets of market dislocation as central banks continue to withdraw liquidity by raising rates and shrinking balance sheets,” she wrote in a Financial Times column last month in the wake of the troubles at Silicon Valley Bank and Credit Suisse. “More needs to be done to rebuild and maintain confidence in the system.”
Greene also said last year that central banks have a “very fine line to walk” between fighting inflation and supporting financial stability following the market turmoil in the UK.
James Smith, ING economist, said the bar to Greene “being more dovish than outgoing Tenreyro seems pretty high.”
Greene “has sounded cautious about the banking system in recent pieces, but has also signaled she thinks the Fed will keep tightening,” Smith said. “The lesson is that we should be cautious about over-interpreting recent comments of new MPC members, particularly given the global landscape could conceivably look quite different by the time she takes her post in the summer.”
Bloomberg Economics economist Ana Andrade said Greene “will probably have no say over the current hiking cycle” as Tenreyro still has two more meetings before leaving.
“Greene’s views will become clearer once she starts her mandate but past interventions suggest she won’t be as dovish as Tenreyro,” she said.
(Updates with details from the statement.)
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