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Bank of England gets Sir Jon Cunliffe as deputy governor Bank of England gets Sir Jon Cunliffe as deputy governor
(about 3 hours later)
The Bank of England has recruited one of the most influential figures during the 2008 banking crash to succeed Paul Tucker as head of the central bank's financial stability arm. The Bank of England has recruited one of the most influential figures who grappled with the 2008 banking crash to succeed Paul Tucker as head of the central bank's financial stability arm.
Sir Jon Cunliffe, a career civil servant who worked closely with former chancellor Gordon Brown at the height of the financial crisis, will succeed Tucker as deputy governor. The 60-year-old is currently the UK's most senior diplomat in Brussels. Sir Jon Cunliffe, a career civil servant who worked closely with former chancellor Gordon Brown at the height of the financial crisis, will succeed Tucker as deputy governor.
Bank of England governor Mark Carney said Cunliffe's experience during negotiations at G8 and G20 summits will prove invaluable as Threadneedle Street seeks to influence the implementation of European and international financial rules. The 60-year-old is Britain's most senior diplomat in Brussels and well known to the Bank's new governor Mark Carney, who said Cunliffe's experience during negotiations at G8 and G20 summits will prove invaluable as Threadneedle Street seeks to influence implementation of European and international financial rules.
Cunliffe will also find himself at the centre of the highly charged debate over the regulation of the UK's high street banks and the City, where regulation from Brussels is having an increasing influence. He will be in charge of dealing with the banking sector, which has recently lobbied for the central bank to agree more relaxed lending rules, despite concerns that several financial institutions remain at risk from collapse. Cunliffe will also find himself at the centre of the highly charged debate over the regulation of Britain's high street banks and the City, where Brussels is having a growing influence. He will have a place on the committees dealing with monetary and financial policy and is being appointed at a time when the Bank is being criticised for demanding banks hold more capital.
Carney said: "I have been fortunate to have worked with Jon for over a decade on a wide variety of international issues at the G7, G20 and Financial Stability Board. He brings an important European and international perspective that will be vital in ensuring that the Bank of England can shape both the UK and international financial systems so that they effectively serve the needs of the real economy." Carney, who replaced Lord King at the start of last month, said: "I have been fortunate to have worked with Jon for over a decade on a wide variety of international issues at the G7, G20 and Financial Stability Board. He brings an important European and international perspective that will be vital in ensuring that the Bank of England can shape both the UK and international financial systems so that they effectively serve the needs of the real economy."
Bank of England watchers have expected a significant clear out of senior staff as Carney, who replaced Lord King as governor, attempts to update the institution and shed its fogey-ish image. Technically Cunliffe is appointed by the queen in a process overseen by the Treasury. Another deputy governor, Charlie Bean, will step down next year. Technically Cunliffe is appointed by the Queen in a process overseen by the Treasury. His appointment is regarded as an effort by Carney to bring in new faces to Threadneedle Street. The new governor will have another such opportunity next year when another deputy governor, Charlie Bean, will step down.
James Barty, head of financial policy at the Policy Exchange thinktank, was critical of the appointment. "After the imaginative appointment of Mark Carney it is disappointing that the government has appointed a career civil servant as deputy governor for financial stability at the Bank of England. The financial crisis demonstrated that knowledge of financial markets is vital for any central banker. This is a missed opportunity," Barty said. James Barty, head of financial policy at the Policy Exchange thinktank, was critical of the appointment of a senior civil servant rather than an expert in markets. "After the imaginative appointment of Mark Carney it is disappointing that the government has appointed a career civil servant as deputy governor for financial stability. The financial crisis demonstrated that knowledge of financial markets is vital for any central banker. This is a missed opportunity," he said.
Cunliffe, who will take up his post in October when Tucker quits to lecture at Harvard University, was not among the runners and riders upon whom speculation had focused once Tucker quit but is thought to be close to John Kingman, the senior Treasury official who sat on the interviewing panel. Cunliffe, who will take up his post in October when Tucker leaves to lecture at Harvard University, was not among the runners and riders that speculation had focused on once Tucker quit and his appointment prompted speculation about the future of Andy Haldane, the outspoken and highly regarded executive director for financial stability – a role regarded as the deputy to Tucker. An advocate of the leverage ratio to rein in the risks of banks – a gauge which is unpopular with the industry – Haldane has expressed different views in public from those of the new governor Carney.
His appointment immediately sparked speculation about the future of Andy Haldane, the outspoken and highly regarded executive director for financial stability – a role regarded as the deputy to Tucker. An advocate of the leverage ratio to rein in the risks of banks – a gauge which is unpopular with the industry – Haldane has expressed different views in public to the new governor Mark Carney. Carney is known to have an input into the selection process – led by Treasury officials John Kingman, Tom Scholar, and Sir Nick Macpherson as well as Sir David Lees, director of the bank's governing body – and choosing Cunliffe is regarded as significant. Not only is he an outsider to the Bank – which has been criticised for lacking an external perspective and being too academic – but also has hands-on experience of Brussels, which is having considerable influence over banking regulation.
Carney is known to have an input into the selection process – led by Kingman and the other senior Treasury official Tom Scholar, top Treasury mandarin Sir Nick Macpherson and Sir David Lees, director of the bank's governing body – and choosing Cunliffe is regarded as significant. Not only is he an outsider to the Bank – which has been criticised for lacking an external perspective and being too academic – but also has hands-on experience of Brussels, which is having considerable influence over banking regulation. Cunliffe is thought to have been one of two external candidates – the other being Morgan Stanley banking analyst Huw van Steenis – as well as the internal candidates Haldane and director of markets Paul Fisher. There is no official confirmation that these were the candidates.
Cunliffe is thought to have been one of two external candidates – the other being the Morgan Stanley banking analyst Huw van Steenis – who were interviewed alongside the two internal candidates Haldane and the director of markets Paul Fisher. There is no official confirmation that these were the candidates.
More outsiders are now expected to be appointed to senior roles inside the Bank as Carney attempts to freshen up its image and approach to the industry.More outsiders are now expected to be appointed to senior roles inside the Bank as Carney attempts to freshen up its image and approach to the industry.
Cunliffe sat at Gordon Brown's right hand during tense negotiations in 2008 following the collapse of Lehman Brothers and the decisions to nationalise Royal Bank of Scotland and Lloyds. He is credited with playing a key role in securing an internationally co-ordinated response in the weeks and months that followed.Cunliffe sat at Gordon Brown's right hand during tense negotiations in 2008 following the collapse of Lehman Brothers and the decisions to nationalise Royal Bank of Scotland and Lloyds. He is credited with playing a key role in securing an internationally co-ordinated response in the weeks and months that followed.
George Osborne, keen to use his negotiating skills, sent him to Brussels to fend off attempts by the European parliament and senior EU officials to smother the City of London in regulation.George Osborne, keen to use his negotiating skills, sent him to Brussels to fend off attempts by the European parliament and senior EU officials to smother the City of London in regulation.
Cunliffe said: "The Bank is of critical importance to the UK's prosperity and stability. It is both an honour and an exciting challenge to be joining the Bank now, as it takes on formally its new role and responsibilities for financial stability.Cunliffe said: "The Bank is of critical importance to the UK's prosperity and stability. It is both an honour and an exciting challenge to be joining the Bank now, as it takes on formally its new role and responsibilities for financial stability.
Tucker will take a post for the academic year 2013-14 at the Harvard Business School in Boston and the Harvard Kennedy School in Cambridge. He had hoped to replace Lord King on his retirement last month but was overlooked for Carney, who said he was "very grateful to Paul for the extremely valuable support he has already provided". Tucker is to take a post for the academic year 2013-14 at the Harvard Business School in Boston and the Harvard Kennedy School in Cambridge. He had hoped to replace King on his retirement last month but was overlooked for Carney, who said he was "very grateful to Paul for the extremely valuable support he has already provided".
"We have much work to do together before he departs. Beyond that time, I look forward to maintaining our close dialogue on a wide range of economic and financial issues," said Carney. Tucker, who has spent his career at the Bank of England, said he regarded the move to academia as a "wonderful opportunity". Tucker, who has spent his career at the Bank of England, said he regarded the move to academia as a "wonderful opportunity".