Kingman for the Bank?
The intense spotlight on candidates for the job of IMF managing director has diverted attention from a vacancy closer to home. Who will replace Mark Carney as governor of the Bank of england?
Under the process started by former chancellor Philip hammond, all the prospective candidates’ interviews were completed by July 31 in time for the announcement by October. headhunters narrowed the field to a longlist of about ten deemed capable.
The list was then winnowed down by Tom Scholar, permanent secretary to the Treasury; his number two, Charles Roxburgh; Brad Fried, chairman of the Bank’s Court; and economist Kate Barker. The candidates who floated to the top were those with best Whitehall credentials.
Top choice for the Treasury is understood to be dark-horse candidate Sir John Kingman, runner-up to Scholar to be permanent secretary and chairman of Legal & General. he recently produced a devastating report on the failings of audit watchdog the Financial Reporting Council. Kingman played a critical role in rescuing the banking system in 2007-9.
Among the other preferred candidates is deputy governor of the Bank of england, Sir
Jon Cunliffe, a mandarin with a history in Brussels. The ante-post favourite for job, chief executive of the Financial Conduct Authority Andrew Bailey, lacks fulsome support at the Treasury.
Calculations have been thrown up in the air by the change of government. Normally it would be the Chancellor making the final selection, and he would pass the recommendation to the Prime Minister.
But as we have seen from the Cabinet and his selection of advisers, Boris Johnson likes out-of-the-box choices.
The PM goes with those who he trusts, which has propelled Johnson’s economic adviser as Mayor of London, Gerard Lyons, into contention. Lyons was interviewed but was not on the shortlist. Questions were apparently raised about whether his grounding in financial and monetary stability was strong enough.
The Bank’s Fried is admirably keen on diversity, with Baroness Vadera, chairman of Santander UK, and the director of the London School of economics Minouche Shafik both good candidates fitting that bill.
Vadera might be too associated with Labour to appeal to a tribal Downing Street. And Shafik’s previous period at the Bank is judged sub-octane.
So what about Lyons? Unlike many of the mandarins, he was brought up in a poor Irish household in Kilburn, north London and did not go to Oxbridge. he does have extensive knowledge of Asia from his stints at Tokyo-based Dai-Ichi Kangyo Bank and Standard Chartered.
he has intimate knowledge of both Japan and China. his role at economists For Brexit, however, will not have endeared him to current and former mandarins, some of whom are disparaging.
Chancellor Sajid Javid could still reach beyond the longlist and persuade a global figure, such as non-candidate Raghuram Rajan, to take the job. George Osborne did this when he signed Carney from the Bank of Canada. The Tories know that whoever is chosen needs to be confirmed by the Commons ASAP. Otherwise the door could be left ajar, which would be a gift to Corbyn.
Float race
ROSS Mcewan has steered Royal Bank of Scotland away from the rocks and squalls left from the financial crisis only to face a new perils.
The decade of ultra-low interest rates, together with fierce competition, has eroded margins and is among the reasons why a 12pc RBS rate-of-return has been set aside. hovering above all of this is the great storm Brexit.
It is depressing the shares of UK banks, compared to North American counterparts. This is of more importance to RBS than rivals because of the overhang of the 62.4pc taxpayer stake.
The Government must bite the bullet and sell down to below 50pc, creating a genuine free float, even if the taxpayer takes a hit. Gone fishing AMID all the change on my local high Street over the last three decades, the lone surviving store, with no refurb of the fascia, is Ron’s Fishing Tackle.
I was reminded of this by the announced sale of essex-based Fox International, europe’s largest privately owned tackle distributor. It has been hooked by Lew’s holdings in Lexington, Kentucky.
Another one that got away from these shores...