Bank of England Court chiefs resign en masse
ALL 16 nonexecutive directors of the Court of the Bank of England are to resign in an unprecedented shake-up of the institution.
The court has been heavily involved in helping to steer the British economy through the credit crisis of the past year. However, because of its size it has come under criticism for being too unwieldly.
To address this, all 16 nonexecutive members, who include several top names from the world of business and finance, will resign.
As few as five of the existing number could be re-elected in a bid to bring in some fresh faces with a deeper knowledge of the financial markets. The 16 include Arun Sarin, outgoing chief executive of Vodafone; Sir John Parker, chairman of National Grid and chairman of the court; Paul Myners, a former chairman of Marks & Spencer; David Potter, chairman of Psion; and Bob Wigley, chairman of Merrill Lynch Europe, Middle East and Africa.
Sarin, Myners, Sir Callum McCarthy, head of the Financial Services Authority (FSA), and Geoffrey Wilkinson, a nonexecutive director of the South West Strategic Health Authority, were reappointed to the court this month.
But in a letter to John McFall, chairman of the Commons treasury committee, Alistair Darling, the chancellor, makes clear that all the nonexecutive directors will rescind their positions when a new bill giving the Bank statutory responsibility for financial stability becomes law soon.
The new, slimmed-down court will consist of 12 members in all, four of whom will be Bank governor Mervyn King and his two deputies, and Lord Turner, the new head of the FSA. The rest will be nonexecutives, half the present number.
It is thought that many of the current figures will choose to step back permanently from membership of the court.
Peter Jay, a former economics editor of the BBC, could also choose not to stand for re-election, as could Susan Rice, chief executive of Lloyds TSB Scotland. The current membership includes Brendan Barber, general secretary of the Trades Union Congress.
Over the past 12 months the court has been active in advising and approving action by the Bank during the credit crisis, including its lender-of-last-resort facility for Northern Rock.
In his letter, Darling said that he saw an enhanced role for a “streamlined and modernised” court in financial stability.
There will also be a new financial-stability committee, made up of members of the court and chaired by the Bank governor.
The Treasury will also be entitled to send a representative to sit on this committee.
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