Bank of England's Shafik to step down in February for top academic post

September 12, 2016 5:19 AM EDT

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By David Milliken

LONDON (Reuters) - Bank of England deputy governor Minouche Shafik will step down at the end of February 2017 to become director of the London School of Economics, the central bank said on Monday.

Shafik, 54, has stuck close to the consensus on monetary policy since she joined the BoE from the International Monetary Fund in August 2014, and had been due to serve until July 2019.

During her time at the BoE, Shafik has reviewed how the central bank gathers information from financial market contacts, after early signs that bankers rigged LIBOR interest rates following the financial crisis were not acted on effectively.

Shafik said it was "impossible to resist the opportunity" to lead the LSE, where she studied for a masters in economics.

She is also likely to enjoy a boost in pay, as the LSE's last permanent director, American sociologist Craig Calhoun, was one of Britain's top-paid academics with a basic salary of 312,000 pounds and a total package worth 381,000 pounds.

Shafik earned a basic salary of 268,000 pounds ($355,000) at the BoE last year and received total remuneration of 362,000 pounds including pension payments and other benefits.

The LSE did not immediately have information available on what Shafik's salary would be when she starts in September 2017.

Shafik will be the LSE's first permanent female director, but not the first former BoE deputy governor to take the role.

Howard Davies, who was the BoE's deputy governor from 1995-97, was the LSE's director from 2003 until 2011. Davies resigned after judging that he should not have advised the university to accept funds from foundations linked to Libyan leader Muammar Gaddafi.

BoE Governor Mark Carney said he would say farewell to Shafik "with gratitude and regret". Her position will be advertised, offering new finance minister Philip Hammond his first chance to make a mark on the central bank's leadership.

(Reporting by David Milliken; editing by Michael Holden and Mark Trevelyan)

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