Here's the list from the report:
- New York Federal Reserve Bank President William Dudley
- Bank of Canada Governor Mark Carney
- Bank of Italy Governor Mario Draghi
- Former Treasury Secretary Henry Paulson
- Former Treasury Secretary Robert Rubin
- Adviser to George W. Bush, Stephen Friedman
So please don't tell me you are surprised, this should be just normal news flow, nothing out of the ordinary:
March 8 (Bloomberg) -- The Bank of England’s appointment of Goldman Sachs Group Inc. Senior European Economist Ben Broadbent to its Monetary Policy Committee shows governments are again looking to the firm for top decision makers, less than a year after it settled U.S. fraud claims.More on Broadbent below. Unfortunately, Sentance, who is leaving this position, was the most hawkish of the rate setters. Does it mean the government is looking for more monetization of their debt?
Broadbent, who has worked at Goldman Sachs since 2000, will replace Andrew Sentance at the end of May, the Treasury in London said yesterday. He joins a panel that has split four ways on policy for the first time since the central bank’s independence in 1997.
Even the SEC has shown an interest in luring Goldman Sachs’ expertise. In January, it hired Eileen Rominger, who spent 11 years in the firm’s asset-management division, including as global chief investment officer. She now heads the SEC’s division of investment management.
In July, the firm paid $550 million to settle SEC civil claims that it misled investors in a mortgage-linked investment that was sold in 2007.
In a separate case last week, the agency accused Rajat K. Gupta, a former Goldman Sachs board member, of telling hedge- fund manager Raj Rajaratnam about Warren Buffett’s $5 billion investment in the bank in 2008 before the deal was announced. Gupta and Rajaratnam deny the insider-trading allegations. The firm wasn’t accused of wrongdoing.
Former Goldman Sachs employees hold key policy-setting positions worldwide. New York Federal Reserve Bank President William Dudley is the firm’s former chief U.S. economist. Bank of Canada Governor Mark Carney is a former managing director. Bank of Italy Governor Mario Draghi, the current frontrunner to become the next president of the European Central Bank, was vice chairman of the firm’s international arm.
Henry Paulson and Robert Rubin both headed the bank before becoming Treasury secretaries, while other former leaders include Stephen Friedman, who was an adviser to President George W. Bush, and Jon Corzine, who governed New Jersey.
Broadbent is the third Goldman Sachs employee to join the Monetary Policy Committee. Former U.K. rate-setters David Walton and Sushil Wadhwani had Goldman Sachs on their resumes before joining the central bank. Broadbent also has worked previously at the Treasury and the Bank of England.
Wall Street has provided other executives for government positions this year. In January, President Barack Obama named William Daley, 62, a JPMorgan Chase & Co. executive and former commerce secretary, as his chief of staff.
March 8 (Bloomberg) -- Britain’s economy can withstand the government’s budget squeeze and an interest-rate increase, according to research published this week by Ben Broadbent, the Goldman Sachs Group Inc. economist who will join the Bank of England’s rate panel in June.
“The fiscal adjustment that the government plans over the coming years is undoubtedly severe,” London-based economists including Broadbent wrote in an e-mailed note dated March 6. “Nevertheless, we take a more sanguine view than many of its impact over the medium term.”
Broadbent, who previously worked at the Treasury and Columbia University, will replace Andrew Sentance on the central bank’s Monetary Policy Committee on June 1, the Treasury said yesterday. He sees investment driving U.K. economic growth this year and his projections for expansion are above the median forecast of economists in a Bloomberg News survey.
While it’s “hard to see much growth” in incomes and consumer spending this year, the economic impact from any potential interest-rate increases by the Bank of England may be limited, Broadbent wrote in the note with economists Kevin Daly and Adrian Paul.
“Investors are concerned that any increase in interest rates would seriously threaten overall economic growth too, both directly, via the effects of cash-flow on consumer spending, and indirectly, by raising the rate of default in the mortgage market,” the economists said. “This concern is understandable but, in our view, it is routinely exaggerated.”
Broadbent will join a committee that has split four ways on policy for the first time since the central bank’s independence in 1997. With inflation at twice the bank’s target and the economic recovery threatened by the government’s fiscal squeeze, policy makers are divided on whether to increase interest rates or expand stimulus.
The bank’s rate-setting panel starts its next two-day policy meeting tomorrow. Last month, Sentance voted to increase the benchmark interest rate by 50 basis points from a record low of 0.5 percent. Martin Weale and Spencer Dale called for a 25 basis-point increase, while the remaining six opted to maintain the current rate. Adam Posen voted to expand the bank’s bond- purchase plan.
“Sentance was at the extreme hawkish end of the MPC but we do not think his loss will divert the focus of the committee,” said Jens Sondergaard, an economist at Nomura International Plc in London who previously worked at the Bank of England. “In our view, Mr. Broadbent will join the hawkish end of the MPC. His view has tended to be more optimistic than the consensus.”