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Deputy governor Paul Tucker quits Bank of England Deputy governor Paul Tucker quits Bank of England
(about 2 hours later)
Paul Tucker, the deputy governor of the Bank of England who lost out on the top job to the Canadian Mark Carney, has announced that he will leave Threadneedle Street in the autumn. Paul Tucker, the deputy governor of the Bank of England who lost out on the top job to Canadian Mark Carney, announced on Friday that he will leave Threadneedle Street in the autumn, after "providing support" to the new governor during his first few months in the post.
In a statement released on Friday morning, the Bank said Tucker would provide support to the new governor, before departing, initially to spend a period of time in US academia. Tucker was widely expected to step down after failing to secure the governorship, but his five year term was not due to end until next February.
In his resignation letter to the chancellor, Tucker, one of the Bank's three deputy governors, said: "I am grateful to you for agreeing that I should step down slightly before the end of my term as a deputy governor of the Bank of England but after I have been able to provide support to the new governor in his first few months in office." In his resignation letter to the chancellor, he said: "I am immensely proud to have had the opportunity to make a contribution to public policy over the past three decades."
Tucker was appointed for a five-year term, which was due to end next February. His name is now likely to be linked with top banking jobs, such as the soon to be vacant chairman's role at Lloyds Banking Group, which is 39% owned by the taxpayer, and could be the first of the two state-backed banks to return to the private sector. In his reply, George Osborne, whose decision to headhunt Carney from Canada thwarted Tucker's long-held ambition to lead the Bank of England, said: "I have no doubt that you will continue to make a towering contribution to the international economic community."
With another of the Bank's three deputy governors, Charlie Bean, due to leave at the end of June next year, Carney will now be able to put his stamp on the Bank by appointing two of his senior lieutenants within twelve months.
Erik Britton, a former Bank economist and now a director of City consultancy Fathom, said: "The interesting thing is who Carney will want as a successor: it may be that he's a new broom in a number of senses, not only shaking up the old thinking, but shaking out the people who were associated with it."
But fresh evidence that Carney may face opposition if he wants to push for more economic stimulus came in a speech yesterday from independent monetary policy committee member Ian McCafferty.
McCafferty warned that the Bank must guard its reputation carefully, and prevent the public's fears of rising inflation from getting out of control. "In this environment, I believe it is important to continue to be mindful of the need to keep expectations well-anchored when setting policy," he said.
According to a statement released by the Bank, Tucker plans to spend some time in US academia, but his name is also likely to be linked with top banking jobs, such as the soon to be vacant chairman's role at Lloyds Banking Group.
As deputy governor responsible for financial stability, Tucker has acted as the Bank's eyes and ears in the City. His closeness to the financial sector exposed him to criticism during the Libor-fixing scandal, when he was called before the Treasury select committee to explain his dealings with Barclays boss Bob Diamond.
The committee largely exonerated Tucker; but the release of a series of emails, including one in which he referred to Diamond as, "an absolute brick", raised questions about his cosy relationship with the City.
Andrew Tyrie, the Conservative chairman of the treasury select committee, said: "Paul Tucker has done an outstanding job, not least in helping shape the international framework for bank resolution, a vital part of the regulatory response to the crisis."
The outgoing governor, Sir Mervyn King, said: "Paul's contribution to the Bank, to monetary policy and more generally to public policy, both in the UK and in the world as a whole, has been enormous."The outgoing governor, Sir Mervyn King, said: "Paul's contribution to the Bank, to monetary policy and more generally to public policy, both in the UK and in the world as a whole, has been enormous."
Many commentators had expected Tucker to leave the Bank after failing to secure the governorship – but it was a surprise that he announced his departure even before King's successor arrived, and will fuel speculation that Carney plans a radical shakeup of the Bank's personnel. Former monetary policy committee member Kate Barker: "He will be missed; he's done a really good job; he's very devoted to the Bank, and worked tirelessly." She added that the 55-year old could yet return to Threadneedle Street. "I can't see him being in academia for long – he's young enough not to go from the Bank for ever." The new governor has made clear that he will only serve five years of his eight-year term. Simon Wells, UK economist at HSBC and a former Bank economist, said, "I'm sure a return to public policy is likely."
Carney, who has worked closely with Tucker at the international Financial Stability Board, which is rewriting global bank regulation, said: "I wish Paul every success in the next phase of his career and look forward to maintaining our close dialogue on how to build a more resilient financial system that more effectively serves the needs of the real economy." Carney, who has worked closely with Tucker at the international Financial Stability Board, which is re-writing global bank regulation, said: "I wish Paul every success in the next phase of his career and look forward to maintaining our close dialogue on how to build a more resilient financial system that more effectively serves the needs of the real economy."
George Osborne, whose decision to headhunt Carney from Canada thwarted Tucker's long-held ambition to lead the Bank of England, said: "I have no doubt that you will continue to make a towering contribution to the international economic community." Internal candidates to replace Tucker include markets director Paul Fisher, and Andy Haldane, director for financial stability. Haldane has made a series of well-received interventions into public debate since the onset of the financial crisis, but has clashed with Carney over the future of regulation.