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The deadline for aspirants to what is arguably the most powerful central bank governorship in the world passed on Monday, with at least three - and possibly four - stalwarts of the UK financial services sector among the candidates, as well as a top European legislator.
The Bank of England is to take on far-reaching powers of financial stability and banking regulation in addition to its monetary policy remit when new legislation takes force by early next year. The term of the current governor, Sir Mervyn King, expires in May and the new appointee must be ready to step into his newly-expanded role.
The candidates confirmed by the Financial Times are Paul Tucker, currently deputy governor for financial stability at the BoE; Lord Turner, chairman of the Financial Services Authority since 2008; Sir John Vickers, chairman of the Independent Commission on Banking and a former chief economist at the BoE; and Sharon Bowles, a Liberal Democrat MEP and chair of the European parliament’s powerful economic affairs committee, which oversees EU regulation of the City of London. As the lone woman in the race, Ms Bowles’ application will broaden the application pool for a job that has always been held by men. However, she is considered a long-shot for the role. Lord Burns, the former Treasury official and economist who is now chairman of Santander UK, is understood to be another possible contender. He declined to comment on to whether he had formally applied.
The appointment is generating so much debate because it is about much more than naming a successor to Sir Mervyn; it is about finding the right person to head a body formed by the most sweeping regulatory reforms in a generation. The new head will also oversee further far-reaching regulatory changes planned for the next few years, aimed at improving financial stability by hiving off the most risky activities of the nation’s banks.
Moreover, the new governor will take charge of a body perceived to have responded too slowly when Northern Rock teetered on the brink of insolvency in 2007 – and then failed to take a hard enough look at its own proceedures and culture after failing to spot the looming financial crisis. For that reason, members of parliament’s key Treasury select committee have been holding hearings on the corporate governance of the BoE and have been critical of key aspects of the legislation which enshrines its new powers.
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