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| Dame Clara Furse survives grilling to secure Bank of England role | Dame Clara Furse survives grilling to secure Bank of England role |
| (4 months later) | |
| MPs have raised serious concerns about the suitability of Dame Clara Furse, a former boss of the London Stock Exchange, to sit on a powerful new body overseeing financial stability. | MPs have raised serious concerns about the suitability of Dame Clara Furse, a former boss of the London Stock Exchange, to sit on a powerful new body overseeing financial stability. |
| Even so, the Treasury select committee (TSC), which subjected Furse to a grilling this week, cleared her appointment to the financial policy committee of the Bank of England. | Even so, the Treasury select committee (TSC), which subjected Furse to a grilling this week, cleared her appointment to the financial policy committee of the Bank of England. |
| Despite its reservations about Furse, who sat on the capital and risk committee at Dutch-Belgian financial firm Fortis during the ill-fated ABN Amro takeover, the MPs concluded she had "the professional competence and personal independence" to be a member of the FPC. | Despite its reservations about Furse, who sat on the capital and risk committee at Dutch-Belgian financial firm Fortis during the ill-fated ABN Amro takeover, the MPs concluded she had "the professional competence and personal independence" to be a member of the FPC. |
| The endorsement of the first female member of the body set up to identify and defuse the next financial crisis followed a difficult appearance for Furse before the committee on Tuesday. She was grilled about her role on the board of Fortis, which was bailed out by Dutch, Belgian and Luxembourg taxpayers during the 2008 financial crisis. | The endorsement of the first female member of the body set up to identify and defuse the next financial crisis followed a difficult appearance for Furse before the committee on Tuesday. She was grilled about her role on the board of Fortis, which was bailed out by Dutch, Belgian and Luxembourg taxpayers during the 2008 financial crisis. |
| The committee said its concerns were based on her lack of awareness about demonstrating the FPC's independence from the government and the way she explained her role on the board of Fortis. The bank was involved in the takeover of Dutch rival ABN Amro along with Royal Bank of Scotland, which also needed be rescued after completing the deal during the height of the credit crunch. | The committee said its concerns were based on her lack of awareness about demonstrating the FPC's independence from the government and the way she explained her role on the board of Fortis. The bank was involved in the takeover of Dutch rival ABN Amro along with Royal Bank of Scotland, which also needed be rescued after completing the deal during the height of the credit crunch. |
| She would have been braced for the concerns of the committee as during her evidence she had been told by the Conservative MP Jesse Norman that her evidence was "amazingly unimpressive". He told her he was considering whether to support her appointment to the FPC. She told MPs she had learnt from her "searing" experience on the Fortis board. | She would have been braced for the concerns of the committee as during her evidence she had been told by the Conservative MP Jesse Norman that her evidence was "amazingly unimpressive". He told her he was considering whether to support her appointment to the FPC. She told MPs she had learnt from her "searing" experience on the Fortis board. |
| She was also asked at the committee whether the FPC should have urgent powers to impose tougher leverage ratios – a gauge of the risks being run by banks – and had annoyed members by saying she did not think such extra measures were necessary. | She was also asked at the committee whether the FPC should have urgent powers to impose tougher leverage ratios – a gauge of the risks being run by banks – and had annoyed members by saying she did not think such extra measures were necessary. |
| Andrew Tyrie, the Conservative MP who chairs the TSC, said: "The FPC will sometimes have to take decisions that are politically unpopular. It is vital that it is independent from government influence. The FPC's external members should also challenge the views of those from inside the Bank and ensure the committee does not fall prey to group-think." | Andrew Tyrie, the Conservative MP who chairs the TSC, said: "The FPC will sometimes have to take decisions that are politically unpopular. It is vital that it is independent from government influence. The FPC's external members should also challenge the views of those from inside the Bank and ensure the committee does not fall prey to group-think." |
| The Bank of England issued a statement saying it was looking forward to the contributions that Furse and the two other new members of the FPC – former Barclays boss Martin Taylor and ex-Goldman Sachs banker Richard Sharp – would make to the committee. | The Bank of England issued a statement saying it was looking forward to the contributions that Furse and the two other new members of the FPC – former Barclays boss Martin Taylor and ex-Goldman Sachs banker Richard Sharp – would make to the committee. |
| Sharp, who had been questioned by MPs about whether he could be independent because of his donations to the Conservative party, had admitted he needed to improve his technical knowledge of bank capital. The committee backed his appointment on the basis that he himself has recognised that he will need to acquire technical knowledge, we are satisfied that Mr Sharp has the professional competence and personal independence to be an external member of the FPC," the TSC said. | Sharp, who had been questioned by MPs about whether he could be independent because of his donations to the Conservative party, had admitted he needed to improve his technical knowledge of bank capital. The committee backed his appointment on the basis that he himself has recognised that he will need to acquire technical knowledge, we are satisfied that Mr Sharp has the professional competence and personal independence to be an external member of the FPC," the TSC said. |
| Taylor satisfied the committee of his credentials, having sat on the Vickers independent commission on banking which recommended banks erect a ringfence between their high street operations and investment banking arms. | Taylor satisfied the committee of his credentials, having sat on the Vickers independent commission on banking which recommended banks erect a ringfence between their high street operations and investment banking arms. |
| "We will expect to see evidence that the concerns raised in this report have been taken on board," said Tyrie. | "We will expect to see evidence that the concerns raised in this report have been taken on board," said Tyrie. |
| The TSC has been critical of appointments to the FPC, a key plank of the coalition's new approach to financial regulation, in the past. In June 2011, when the FPC was just being created, the MPs had called for an additional external member to be appointed and raised questions about the independence of Alistair Clark, a former Bank employee. The three new appointments are to replace Clark, Robert Jenkins and Michael Cohrs. | The TSC has been critical of appointments to the FPC, a key plank of the coalition's new approach to financial regulation, in the past. In June 2011, when the FPC was just being created, the MPs had called for an additional external member to be appointed and raised questions about the independence of Alistair Clark, a former Bank employee. The three new appointments are to replace Clark, Robert Jenkins and Michael Cohrs. |
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