Any other business

Why Downing Street still hasn’t named a new Bank governor

5 October 2019

9:00 AM

5 October 2019

9:00 AM

Private secretary: ‘The Bank of England governorship, Prime Minister… opposition MPs have been saying it’s a political stitch-up and calling for the shortlist to be made public. Have you had time to look at the file?’

Boris, distracted: ‘Stitch-up piffle! I thought we’d picked my economist chum Gerard Lyons — very sound on Brexit.’ ‘Treasury wouldn’t have him, Prime Minister. They’re trying to fix it for one of their own, Sir John Kingman, former second permanent secretary, now chairman of Legal& General.’

‘And weren’t we going to pad the list with women and, ah, minorities? Like Baroness Wossername?’ ‘You mean Labour peer Shriti Vadera, chair of Santander UK, Prime Minister? I’m afraid she thinks you’re Satan’s cousin.’

‘Oh dear. What does Dom say?’ ‘He says prorogue the Bank till Brexit’s done.’ ‘Terrific. Can we do that?’ ‘No, Prime Minister… Perhaps I should ask the Chancellor? Choosing the governor is nominally his responsibility, after all.’ ‘The Chancellor?’ ‘Mr Javid, Prime Minister.’ ‘Oh him. Cripes, no. He’s had enough limelight this week. What we need are more eye-catching candidates… I suppose Miss Arcuri’s out of the question?’

‘Yes, Prime Minister. But one of the interns found a new name on Google: Dame Helena Morrissey, high-profile pro-Brexit City fund manager, also at Legal & General as it happens, champion of women in the boardroom. She’d certainly grab headlines.’

‘Excellent. Central banking experience?’ ‘No, Prime Minister, but she does have nine children.’ ‘So what? Got a fair few myself.’ ‘Yes, but hers are all with her husband, who’s a devout Buddhist.’

‘Aha, family values. Very much in favour of those, aren’t we? No surrender on that front, eh!’ ‘Er… no, Prime Minister.’ ‘Or perhaps we’d be better off with someone who won’t grab headlines because no one gives a toss what he says these days? Phone Mark Carney and ask him to stay on indefinitely…’ ‘Yes, Prime Minister.’

Left behind

Internal candidates for governor — including deputies Ben Broadbent and Jon Cunliffe and Financial Conduct Authority chief Andrew Bailey — have faded in the betting, while the Bank’s most interesting thinker, chief economist Andy Haldane, is rarely mentioned at all. But if he has seemed absent from national debate lately, that may be because he’s been busy visiting Britain’s ‘left-behind’ places and talking to their citizens. The result was a remarkable speech in Newcastle last week, using the nearby former mining town of Ashington as a test case and analysing its economic needs in terms of transport, connectivity, schools, housing, ‘social spaces’, ‘good work’ and credit.

For those who winced at the Chancellor’s gimmicky conference speech touching on some of these issues, Haldane is the antidote. I’ll highlight just one of its resonant passages, about the future of work. Ashington’s last pit closed in 1988, but the town is not without well-paid new jobs in Akzo-Nobel’s £100 million Dulux paint factory, the most advanced in the world. The trouble is that this showpiece of 21st–century manufacturing employs only 150 people, 1 per cent of the town’s workforce, whereas the pits employed 80 per cent. Pictures of its shopfloor are empty of human beings. ‘The robots are coming,’ says Haldane, and their impact will be greatest on the sort of jobs that tend to cluster in ‘the UK’s coldest economic spots’. This means ‘the next technological wave, while lifting those on the high road, may flood those on the low road’. The answer lies in higher skills, faster broadband, livelier communities and broader horizons; and — yes, Chancellor, I’ll give you this one — more buses (and trains) to carry the left-behind towards better prospects.

Told you so

I wrote three weeks ago that WeWork, the US-based global office landlord that presents itself as a caring-sharing tech business, was ‘overhyped and probably overstretched’ and would be sensible to shelve a proposed IPO for which indicative valuations — as high as $47 billion, despite huge operating losses — looked absurd.

Sure enough, the flotation has been suspended after reports that the valuation might have to sink as low as $10 billion — and founder chief executive Adam Neumann has resigned, though he’s still there as non-exec chairman. The question in my mind is how banks such as JP Morgan and Goldman Sachs could be so cynical as to try launching this classic tech-bubble skyrocket in the first place.

Lakeside saga

The world is falling apart, Brexit is tearing our polity to pieces, the global economy is going to hell in a handbasket and there isn’t even space for a restaurant tip this week; but still the egotism of bankers knows no bounds. I’m gripped by the Swiss soap-opera of Iqbal Khan, a former Credit Suisse hot-shot who has just become co-head of wealth management at UBS, and his clash with Credit Suisse boss Tidjane Thiam, to whom Khan was previously seen as heir apparent.

Trouble began when Khan bought a house next door to Thiam’s in an exclusive Zurich suburb — and the pair fell out over the position of some trees in Thiam’s garden. Tensions rose until Khan resigned three months ago to join rival UBS. Thiam’s lieutenant Pierre-Olivier Bouée then hired private detectives to follow Khan and photograph anyone he met, in case he was trying to poach other Credit Suisse staff. But two weeks ago Khan challenged one of the followers in the street and took pictures of him with his phone — which the snooper tried to snatch before fleeing. Now Bouée has resigned as the Credit Suisse board tries to repair the reputational damage. Thiam, having led the bank back to its first profit since 2014, will probably hang on to his job. But the picture lingers of pampered princelings squabbling over their lakeside view.

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