Tucker 'favoured' as next Bank governor

  • 13 November 2012
  • From the section Business
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The next governor of the Bank of England will be Paul Tucker, the current deputy governor, if the chancellor and prime minister choose the candidate favoured by some senior regulators, government advisers, central bankers and bankers.

I have sounded out the views on who should succeed Sir Mervyn King from 10 senior public-sector and private-sector figures, whose opinions would be regarded as relevant by George Osborne and David Cameron.

They include current and former central bankers and regulators, government advisers, members of bank boards and senior City figures. Some are Tories, but most are non-partisan.

To be clear, this is not an exercise of scientific robustness. But the 10 are not a clique or connected to each other.

If opinion among the 10 had been more divided, I would have been tempted to dismiss the outcome. But the margin in favour of Mr Tucker was too great to ignore.

Mr Tucker was the first choice of half of those I consulted. He was the second choice of all the others, except for one banker - who put him last.

My research is a strong indicator of what Mr Osborne has been told, by people he respects, about who should occupy arguably the most powerful public-sector role outside government.

I am reliably informed that Mr Osborne has taken his own soundings and is aware of Mr Tucker's popularity among what can only be described as a regulatory, City and political elite. "The chancellor is aware of these views," said a government source.

It does not guarantee that Mr Tucker will be chosen. The decision has not yet been taken - although the chancellor hopes to announce the new governor shortly before his Autumn Statement on 5 December or shortly before then.

I asked the 10 eminences to rank the four leading candidates - all of whom are on the shortlist to be governor - in order of preference.

The four are Mr Tucker, Lord Turner, chairman of the Financial Services Authority, Sir John Vickers, who chaired the Independent Commission on Banking for Mr Osborne, and Lord Burns, former Treasury Permanent Secretary and currently chairman of Santander UK.

I should point out that there is one other individual who has succeeded in getting on to the shortlist to be governor. I do not know the identity of this individual, although I have been told that this person is unlikely to get the job.

In this exercise, Lord Burns and Sir John Vickers were more-or-less tied in second place, with Lord Burns ahead by just a whisker.

Lord Turner was the least popular of all the candidates, by a margin. He was given a low ranking even by those whom he might have considered friends and allies.

Some may be surprised that Mr Tucker is the preferred candidate of many, given that he is a lifer at the Bank of England and there is widespread criticism of the Bank of England's failure to prevent the financial boom that led to the great banking bust of 2008.

The new governor will arguably be the most powerful ever, in that the Bank of England's formal powers to curb inflation by setting interest rates are being augmented by new powers to stop banks going bust and to dampen overheating in markets.