Former UK Chancellor George Osborne is considering running for the top job at the International Monetary Fund after two lucrative years away from politics, according to reports.
The Financial Times reported on Thursday that Osborne has told friends he is interested in the job and hopes to secure the support of likely future Prime Minister Boris Johnson as Britain’s candidate for the role.
The IMF post became vacant on Tuesday after current managing director Christine Lagarde was unexpectedly nominated as the next head of the European Central Bank.
News that Osborne is keen on the job has made hm the favourite to land the role. Betway put the odds of Osborne succeeding Lagarde as IMF chief at 25/1, according to a Bloomberg report on Wednesday. However, Betway was quoting odds of 5/2 for Osborne by Thursday morning. Betting exchange Smarkets had Osborne as the favourite, with a 25% chance of landing the job.
Carney vs. Osborne
Osborne’s shortening odds mean he has overtaken Bank of England governor Mark Carney as the favourite to get the IMF job.
Carney emerged as any early front runner to replace Lagarde, who will take up her new role in October. Carney is due to leave the Bank of England in January 2020 and has strong connections in international finance thanks to his time chairing the Financial Stability Board between 2011 and 2018.
However, the FT said Osborne has told friends the IMF needs a “skilled political communicator and operator... not a technocrat,” suggesting this could be Osborne’s line of attack against Carney.
The IMF is a global bank that lends to countries and governments. It is one of the most influential non-political organisations in the world and its managing director is one of the world’s most powerful figures in both finance and geopolitics.
While the organisation is meant to be globally neutral, representing a coalition of over 180 countries, its board is weighted in favour of the biggest economies and the appointment of a managing director is usually a political affair. The board appoints the IMF director.
Political black book
Osborne, who currently edits the London Evening Standard newspaper, would likely turn to political contacts built up during 16 years as an MP to help build international support for his bid.
“Osborne has good links to the Republicans in the US and with China and recently backed Boris despite being a Europhile,” Sarbjit Bakhshi, head of political markets at Smarkets, told Yahoo Finance UK. “So if any Brit could do by way of US, Chinese and UK backing, it will be him.
“However, Brexit has damaged the UK's standing in the world for sensible economic policy.”
One person who would likely support Osborne’s bid is Lagarde. Osborne was the first politician to publicly support Lagarde’s nomination to run the IMF in 2011.
Osborne could also benefit from his nationality. Custom dictates that the IMF job is given to a European, while the World Bank chief is an American. It could count against Carney that he is Canadian, although he does have an Irish passport and gained UK citizenship in 2018.
Other possible candidates for the IMF job include former Reserve Bank of India governor Raghuram Rajan, former US Federal Reserve chair Janet Yellen, Bank for International Settlements head Agustin Carstens, and Credit Suisse CEO Tidjane Thiam.
If Osborne is successful in his bid for the IMF role, it would be his tenth job since leaving Parliament in May 2017. As well as editing the Evening Standard, other roles Osborne has include advising BlackRock and the holding company that owns Juventus football club, chairing the Northern Powerhouse Partnership thinktank, and various academic roles. Osborne earns £13,000-a-day for his role at BlackRock.
Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.
Mark Carney tipped to replace Christine Lagarde at the IMF