Goldman's O'Neill is tipped to join Bank governor race

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The Independent Online

In theory, the post of next Governor of the Bank of England won't even be advertised for several months.

In reality, the scheming and jostling for position are already in full flow. A new name in the frame today is Jim O'Neill, the affable Goldman Sachs economist now chairing the bank's asset management division.

Reached yesterday following an article in the Sunday Times that promoted O'Neill's "unique qualifications" for the post, he declined to comment, but clearly wasn't ruling himself out.

That he is looking for a new challenge won't be seen as a surprise in the City.

His move from chief economist at Goldman to his present role was seen as a sideways shift at best. GSAM is not a prestigious part of the mighty investment bank. O'Neill joins a roster that already includes deputy governor Paul Tucker and Financial Services Authority chairman Lord Turner. In the Square Mile and among bank chiefs, it is likely Tucker will garner strong support.

Bankers say he is more approachable and amenable than the present Bank governor Sir Mervyn King ,and they feel comfortable talking to him in confidence about potential trouble spots. Other names in the frame are said to include former cabinet secretary Lord O'Donnell, former Barclays boss John Varley and Sir John Vickers, who chaired the Independent Commission on Banking. King will stand down at the end of his second five-year term in June 2013.

He has been an outspoken critic of banks and banker pay, saying in a speech earlier this year: "The legitimacy of a market economy will inevitably be challenged if rewards go disproportionately to a small elite, especially one which benefited from the support of taxpayers.

"Those taking decisions on remuneration, in the financial sector and elsewhere, need to understand that a market economy rests not just on incentives, but on the acceptance that the distribution of rewards is fair."