Editorial | Byles an inspired choice for BOJ
Richard Byles isn’t the obvious choice to head a central bank. Increasingly, across the world, those jobs go to academic economists with PhDs.
Neither would too many people have assumed him to be the Holness administration’s first choice for the governorship of the Bank of Jamaica (BOJ). Yet, it may have been an inspired one. For, Mr Byles has a track record of being a star performer in the jobs he has held. This one may not be in the normal trajectory, but he isn’t without preparation for it.
After Brian Wynter’s decade-long stint, Mr Byles is coming to the governorship at a period of significant change for the BOJ. Legislation is now working its way through Parliament that will formally make the central bank’s primary responsibility “the maintenance of price stability”.
In other words, the BOJ will be increasingly concerned with establishing and achieving inflation targets, with the underlying aim of supporting high employment. It won’t, by law, have to concern itself with supporting the Government’s fiscal regime, or helping out finance ministers if, and when, they fall into trouble.
Indeed, the BOJ has been moving in this direction for several years. The difference now is that the overarching authority of the finance minister is being removed, leaving the governor and his supporting committee with full control over the levers of monetary policy. Here is where Richard Byles’ appointment is important.
Someone else, even with the gird of the law, who is stepping into an unaccustomed job may be inclined to be tentative and circumspect in asserting authority. That isn’t Richard Byles. Though quiet-spoken, he is bold, assertive and clear of mind.
Moreover, he possesses what Paul Volcker, the celebrated 1980s chairman of the US Federal Reserve, declared a decade ago to be more important to success as a central banker than an academic’s facility with monetary policy research: guts. That, however, doesn’t mean that Mr Byles is either academically underqualified or ill-prepared for the role. He holds undergraduate and MSc degrees in economics and development.
Critically, he has had a successful 40-year career in business, including finance-related ones. His stellar qualities began to become apparent with his 1988 appointment by Maurice Facey to the Pan Jamaican Investment Trust. An insufficiently noted aspect of his achievements is how, during the bloodletting of the 1990s financial sector collapse, he adroitly steered First Life Insurance through the turmoil, largely unscathed.
MATTERS TO SETTLE
His skills as an entrepreneurial manager were also on display as chief executive officer, and subsequently chairman, of Sagicor Financial Group, which he had a major hand in turning into the crown jewel of the regional financial/tourism conglomerate.
Mr Byles’ credentials for his central bank role were further burnished by his leadership of the Economic Programme Oversight Committee (EPOC), a body with public, private and labour-sector representatives that since 2013 has monitored Jamaica’s performance under its agreements with the International Monetary Fund.
During the three years of his chairmanship, Mr Byles was not only an outspoken advocate for fiscal prudence and economic reform, but his fearless commitment to fact and truth gave EPOC credibility and helped build consensus around the reform project.
Notably, he never flinched when attacked for his declarations by the opposition party of the day, which, now in government, has appointed him as governor of the central bank.
Given that he is joining the central bank from being the head of a financial group, some of whose subsidiaries are subject to either direct or indirect oversight by the central bank, and in which he may have holdings, Mr Byles has matters to settle. But we are satisfied those potential conflicts will be aired, and cleared, before he assumes the job.
At age 68, Richard Byles clearly isn’t intended to be there for the long term, but rather to lead through a period of transition. Which he has the energy and skill to do. And make a difference.