Why Cunliffe's appointment to the Bank of England matters

Sir Jon Cunliffe being knighted Sir Jon Cunliffe has been praised for his knowledge of European affairs

So what does the appointment by the Chancellor of Sir Jon Cunliffe as deputy governor of the Bank of England, with responsibility for financial stability, tell us?

Three things.

1) The Chancellor is seriously concerned that the eurozone bloc will constantly and consistently vote against the UK's interests when it comes to the regulation of banks and financial businesses.

Cunliffe knows the mandarins, central bankers and regulators of Europe better than anyone.

So the thinking is that if anyone can head off new rules perceived as damaging to the UK at an early enough stage, to pre-empt a political battle that Britain can never win (as a euro out, we don't have the votes), it may be him.

2) The Treasury became seriously alienated from the Bank in the dying days of Mervyn King's tenure as governor.

Mervyn King's attack on the Chancellor's new financial guarantees for some mortgage borrowers still rankles.

But more importantly, and as I have mentioned before, the Treasury was incensed that the Bank of England's Prudential Regulation Authority announced the imposition of a new leverage ratio on banks, to strengthen them, in a way that could have seriously impaired the ability of Barclays and Nationwide to provide vital credit.

The announcement was something of a bolt from the blue for the Treasury. And since then there has been a good deal of scrabbling around, to phase in the new requirement for both Barclays and Nationwide to hold additional capital in a way that doesn't crunch their short-term capacity to lend.

The point about Cunliffe is, that as a former Treasury second permanent secretary, he is unlikely to spring such unpleasant shocks on his erstwhile colleagues.

3) The new governor regards a strong, amicable relationship with the Treasury as essential to his ability to do his job.

George Osborne would never have appointed Cunliffe against his wishes.

As I pointed out a few weeks ago, the Treasury was never going to appoint either of the Bank of England candidates, Andy Haldane and Paul Fisher.

Carney did not die in a ditch to alter the Treasury's conviction that this job should not go to a Bank insider.

Robert Peston, economics editor Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 84.

    "We need"
    At each sensible level of strategy
    Representative decision-makers

    @79,80,82 recall Brer Rabbit
    "Please no, not reduce the size of my court!"

    To beg and win Income Maximum "x 20", illusory at that, is uncomprehending or betraying to leave our children subject to the tyranny of fear and greed, the court waxing and waning but ever to fail 'representation' and 'democracy'

  • rate this

    Comment number 83.

    Make MPs WORK - scrap their long holidays.
    John - don't disagree, but more important is the need to make them work for us and not as corporate "consultants".
    The extent to which our parties are compromised beggars belief - Cameron has more strings than Pinnochio and a humungous snotter

    Millionaire lobby veg like Jeremy Hunt encapsulates what is broken in our US style corpocracy

  • rate this

    Comment number 82.


    Along with reducing politics to an efficient size, if we still want a Royal Family ( don't know that it isn't an institution well past its sell by date.) Then it needs to be a smaller one where the costs are far lower - fewer flunkies, less police protection after all there are plenty of them if we lost one or two, & fewer palaces.

    Buck house, Westminster & Windsor would make nice hotels.

  • rate this

    Comment number 81.

    My economy is good, how is yours?

  • rate this

    Comment number 80.


    Make MPs WORK - scrap their long holidays.

    120 MPs is more than enough in this internet age.

    Limit their terms to 2 of 5 years.

    More role for counties, city, town and even parish councils (and make them all smaller!.

    SUBSIDIARITY must be the watchword.

    The past is no reference point - we need efficient responsive & non corrupt structures fit for the new century.

    Make em telecommute!

  • rate this

    Comment number 79.


    I back fewer politicians!

    120 at Westminster is enough rather than 650. Even the EU has only 756 to govern the whole of the EU. If they had the same proportion as the UK they would have 6500 members! The 756 would reduce Westminster to 75. But those lovely LibDems wouldn't even reduce it to 600!

    We need to campaign for just 120 - put together every 5 seats (of 600).

    Scrap Lords.

  • rate this

    Comment number 78.

    #70 P
    Don't disagree about unnecessary levels of politicos but look what happened when there was the merest suggestion of Lords - the tory backbench militia went into overdrive.
    Ironically, these same clowns make noise about unelected eurocrats.

    I would rather see the ex cons, offshore billionaires and hereditary peers go - they have done nothing to halt the worst excesses of Rip Off Britain.

  • rate this

    Comment number 77.


    On Brussels:

    The London cabal have many centuries of crating and maintaining their 'control' structures, but Brussels has much more diversity and has only been around for fifty years or so.

    Also note: the USA Pork Barrel politics is far worse at State level than in Washington (but both are bad!)

    London has been profoundly 'influenced' by big banking - unlike the EU!

    We need both!

  • rate this

    Comment number 76.

    74. All for All
    Guess a Kids cause.Yep.
    I helped drive a truck of supply's to an orphanage in Romania.Helped with the street kids for a while.Nothing prepared me for the emotional hit,on giving a sandwich to a very hungry boy who wolfed down one half,then before he devoured the other half he offered it to me. I have been involved ever since,but have never given as much as that little boy.

  • rate this

    Comment number 75.

    Have finally got your message Robert.
    The people making this appointment are engaged in Politics...And, as ,is well documented in UK, History, all Politicians are innocent.
    The people voting for them have to accept...
    They are just as guilty.
    We voted for them.

  • rate this

    Comment number 74.

    Phffft @72
    A 'second family' in Moldova??
    Guess a Kids cause?

    Point taken on priorities, and full agreement on "Brussels" as a focus of major concern, but to be taken, for hope, rather than retreated from in despair

    There's no hiding place, no real appeasing of tyranny

    Democracy - truly lit - can move with the speed of thought, securing all, individuals, families, cultures side-by-side

  • rate this

    Comment number 73.


    "Britain should NOT have an economy based on the Banking Industry. It's a house of cards."

    Agree and would add: "investment" bankers simply churn liabilities between one another and skim a "fee" each time.

    They are a parasitic infestation in the guts of our economy.

    We need a good worming treatment before we can begin to grow again.

  • rate this

    Comment number 72.

    69. All for All

    One could say any thing on here & none would be the wiser.
    But believe me,I could have driven Porsche but the Kids in Moldova ate it.For me its a 10 year old Honda.My choice.

    EU not the issue,Agreed,its Brussels.

  • rate this

    Comment number 71.

    Phffft @70
    No "Ukipper"
    But believing balance of advantage beyond dispute?

    Hope in ever further break-up, as best context for wider trade?

    Offa for England, back to the Dyke? Then no need for next Owain Glyndwr to fight for peace & prosperity?

    But who - anywhere - has not over-reached, in nationalist hope of a better Law?

    The principle is the thing: equal partnership the starting point, not EU

  • rate this

    Comment number 70.

    68. Billythefirst

    European CAP giving wealthy land owners money for set aside & other scams,it is just another Westminster.The only thing I am able to say with feeling,is that I want less politicos not more of them,hence my boring monotone of no Brussels.In case any to think me a Ukipper. WRONG. Trade with all especially our near neighbors.Just don`t create more politicians for crying out loud

  • rate this

    Comment number 69.

    Phffft @65
    "Less government" for better banking
    Why faith in "Westminster"?

    "Human nature" best-harnessed by 1950? Or still riding see-saw of hope?

    We 'have it in us' to follow conscience, just needing freedom - equal partnership real democracy - to be able to do just that, no longer to be torn by material conflict of interest, not inevitably to betray each other and ourselves

    EU not the issue!

  • rate this

    Comment number 68.

    67. Phffft
    Ordinary folk get taxed,their hard earned money creamed off given to Brussels,
    The way that IDS works it out is to reflect on the fact that he lives rent free on the wealthy in laws estate, an estate which has been in receipt of 1.6m€ of tax payer subsidies

    This from a hard right anti public sector hatchet hypocrite, just like the expense spongers Maude & Fox - truly sickening

  • rate this

    Comment number 67.

    Ordinary folk get taxed,their hard earned money creamed off given to Brussels,then some say Brussels is our savior, how the hell do you work that one out?.Its another dead weight on the backs of people.Less bloody government in Westminster & no Brussels.Let Jo Soap keep what he earns to improve his life & share as he sees fit.

  • rate this

    Comment number 66.

    Have been reading about African dictatorships as one does. It is remarkable how our thralldom to the City creates similarities in the UK between our rulers and those regimes where self-enrichment was a principal aim of those in power. At the expense of the ordinary population, naturally and using whatever corrupt means served their purpose.

  • rate this

    Comment number 65.

    60. John_from_Hendon

    So you want Brussels,you do realize you will always have Wminster.Two places of massive government politicos all on the make.If you think Brussels more honest,with human nature as it is, people,are people are people,you are going to be disappointed.
    Every revolution brings its own tyranny,A Blairesque European President voted in by others.No thank you. LESS government


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