Tucker 'favoured' as next Bank governor

 

The BBC's Robert Peston said the job will carry new powers aimed at avoiding another financial meltdown.

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.

The shortlist

  • Paul Tucker, deputy governor of the Bank of England
  • Lord Turner, chairman of the Financial Services Authority
  • Sir John Vickers, chair of the Independent Commission on Banking
  • Lord Burns, chairman of Santander
  • An unknown fifth candidate

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.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +4

    Comment number 57.

    @46.AqualungCumbria
    "ONS also announced it would be introducing a new way of measuring inflation next March
    [...]
    Dont be shocked when they come up with a "better " way of calculating GDP that will also bear no relation to reality"

    Already taken care of: through the GDP Deflator, inflation numbers affect GDP numbers, so lower inflation numbers = higher GDP numbers

    Creative accounting at its best

  • rate this
    +3

    Comment number 56.

    Should've been the other guy, this ones just a patsy for the banks.

  • rate this
    +3

    Comment number 55.

    the only movement detected in the BOE since the crisis is the whirring of the QE presses.
    Is anyone awake in there?
    have the staff been zombified like the banks?
    bring in Louie Walsh as personal trainer to the guv'ner to see if the bank staff can actually move

  • rate this
    +6

    Comment number 54.

    Why not appoint somebody who has the interests of the REAL economy at heart... You, me, taxpayers in general and pensioners. The people who need money to spend, to "grow" the economy

    As it is all of the above are being shafted to service the financial sector and government debt

    Not good enough

  • rate this
    +3

    Comment number 53.

    http://www.guardian.co.uk/politics/2012/nov/12/david-cameron-trashers-banks

    "The prime minister said the government was introducing tough penalties for those in the financial services industry who break the law and the most transparent rules of the world's leading financial centres on pay and bonuses."

    Hard not to laugh really.

    Tells us what we can expect from the next Governor too.

  • rate this
    +3

    Comment number 52.

    I have not been keen on Mervyn King - policies or decisions.
    I don't "know" Paul Tucker, Deputy Governor of the Bank of England.
    But to work so closely together must require some cutting from the same cloth, that and the fact that Paul would be the pick of some senior regulators, government advisers, central bankers & bankers: Yells at me "Don't do it!"

  • rate this
    -1

    Comment number 51.

    More than who takes over - biggest question should be is the BOE doing the right job & what it the BOE's role & purpose eg managing inflation

    How can BOE manage inflation though eg interest rates as is daft when VAT is proven to be the best tool to manage eg UK RPI inflation & QE can finance VAT reductions

    More mistakes ready to be made over BOE as issue needs full strategic review

  • rate this
    +8

    Comment number 50.

    Any new Governor who continues to let inflation rip and has a bad attitude to raising interest rates will be a bad choice. Get rates up, at least pre the crash to start with. Regulate lending, ban all loans over 70% of value. Ban cheating practises over savings accounts intro offers, remaindering etc.

  • rate this
    +10

    Comment number 49.

    andy haldane director of financial stability BOE has gone on record to say that banks should be broken up.
    but what has happened in the last four years
    what will happen in the next four years
    my guess errrrrrrrrrrrrrrr
    NOTHING

  • rate this
    +3

    Comment number 48.

    This post was advertised so the shortlist gives an interesting verdict on how the job is perceived externally. My sense is that Paul Tucker is the least worst candidate. I am not suprised that Lord Turner trails informed opinion. His tenure at the FSA has been characterised by wisdom after the event which doesn't bode well for the BofE governorship.

  • rate this
    +4

    Comment number 47.

    More mistakes ready to be made here at the BOE?
    Big question is not just who takes over after Mumbo Jumbo Goon but what is the role & purpose of the BOE?
    BOE uses crude interest rate manipulation to calm inflation when VAT is demonstarbly more effective
    FI's not passing on low interest rates & QE money can be used to both cut VAT & calm inflation as would negate any adverse monetary affects

  • rate this
    +9

    Comment number 46.

    The ONS also announced it would be introducing a new way of measuring inflation next March

    This is how you meet your targets, creative mathematics.... not messing about with monetary policy.

    Dont be shocked when they come up with a "better " way of calculating GDP that will also bear no relation to reality.....

  • rate this
    +4

    Comment number 45.

    43.A

    "the BoE has done all it could to support zombie companies and deflate the goverment debt."

    Don't believe the spin. This is austerity promotion. Government debt is quite low by historical standards. Private debt and most business debt is similar in scale.

    The big, unsustainable debt belongs to the zombie banks and it is still backed by dubious assets.

  • rate this
    +10

    Comment number 44.

    In other news, foxes select as the new Head Farmer the farmhand that always leaves the chicken coop door open.

  • rate this
    +16

    Comment number 43.

    Inflation of 3.2% says it all.

    This is not the Bank of England but the Bank of Estate Agents, Speculators and Bonuses.

    Inflation has decimated growth and instead of having an independent BoE which would stop the asset bubbles and protect low/middle incomes, the BoE has done all it could to support zombie companies and deflate the goverment debt.

    Tucker and co are part of the problem.

  • rate this
    +7

    Comment number 42.

    39.ComradeOgilvy
    19 Minutes ago
    "UK inflation rate rises to 2.7% in October"
    ==
    We print money, dealue the currency and things costs more.

    Seems the things I buy - food, fuel and some leisure spending costs about 5-6% more than last year.

    Maybe the Carlton Club and the Royal Horse Society have frozen their membership fees. I wouldn't know.

  • rate this
    +1

    Comment number 41.

    Iknow everyone on the blog is too financially savvy to gamble so don't look at
    http://sports.williamhill.com/bet/en-gb/betting/e/2751556/Next%2BBank%2BOf%2BEngland%2BGovernor.html
    but the two women at 20-1
    what we really want to know RP what odds did you get and how much?
    (just joking RP full respect)

  • rate this
    +1

    Comment number 40.

    Robert you are doing a Nate Silver with a sample of 10 good try but by quantum mechanics you may have afffected the outcome!
    PT deputy director of financial stability at BOE in 2002..
    been round the block has Paul
    http://www.bbc.co.uk/news/business-13756353
    http://news.bbc.co.uk/1/hi/business/8158348.stm http://news.bbc.co.uk/1/hi/business/1034085.stm
    PT is not a fast mover
    JV for guv'nor

  • rate this
    +2

    Comment number 39.

    "UK inflation rate rises to 2.7% in October"

    http://www.bbc.co.uk/news/business-20310102

    Do the numbers sound about right to anyone here? Or have they missed the leading "1"?

    And they blame University tuition fees. Politicians fault then. Nothing to do with the BoE.

  • rate this
    0

    Comment number 38.

    Obviously some of the contributors to this blog have got bored with the subject and have blogged on what they find interesting. I have some sympathy. However addressing the subject are you sure that Mr Tucker is AKA the ubiquitous Mr Buggins. Will we get a clone & continue to be assaulted by dead sheep. Gordon Brown is an obvious candidate because he will be keen to atone for past misdemeanours.

 

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