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Iain Anderson Headshot

What Do We Want From Our Guv'nor?

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Acres of column inches have already been expounded on the likely candidates to replace Sir Mervyn King as Bank of England Governor.

As there's over a year before he steps down from the role in June 2013, it already feels like the appointments process may take on a presidential primary feel to it. But have times really changed from the 'smoked filled rooms' nudge and winks process of not so long ago? Not so far.

I believe Treasury Select Committee chairman Andrew Tyrie MP is rightly calling for US Congessional style public hearings of the potential candidates to replace what seems to be the current 'chaotic informal appointments' process being overseen by No10 and No11 Downing Street.

And I agree with Tyrie's comment that this appointment is perhaps the most important public appointment to be made by this or any other government.

Aware of the more rigorous scrutiny, many of the serious candidates from Paul Tucker to Adair Turner have gone into print or are making speeches on subjects as varied as the need to effectively fuse monetary and macro-prudential policy right the way through to the ongoing debate about the social utility of finance.

While others such as former Cabinet Secretary Lord Gus O'Donnell and current Canadian central bank governor and Financial Stability Board chief Mark Carney have public records that speak for themselves.

There is a raft of chatter already about whether we should go for an outsider or an internal candidate. A foreign or a British citizen. Someone who is close to the financial sector and can talk the same language and, perhaps, know when they are being hoodwinked or a financial outsider who is not imbued with group-think.

Let me set out my view.

We need a governor with real vision. Not just a policy wonk but a candidate who has a clear plan on what the UK needs to do in developing monetary and financial sector policy.

Someone who can see around corners and see far enough ahead. That has been the problem in recent times.

UK financial sector regulation was a watchword for prudence and a model for governance globally in the past. The last decade has undone that reputation and done so rather badly.

So we need a figure with significant calibre already on the international stage - whether they be British or not.

The new governor must be able to combine a new roadmap for monetary policy - which has many questions now asked of it given the past few years - alongside the understanding of financial markets to make sense of the new dual role in overseeing financial stability

Not all the potential candidates so far meet the bill. Many of them do. But to road-test this, we do need an open appointments process to check the suitability of what is being asked for. That's one man two guv'nors.

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