Financial News

  • 18 March 2014, 10:29

Bank of England Recruits Habgood As New Chair

The Treasury will name Anthony Habgood as the new chairman of the Bank of England's supervisory body on Tuesday, furthering a shake-up of its leadership since the arrival of Mark Carney as its Governor.

Sky News has learnt that a statement is expected to be made by the Treasury on Tuesday morning appointing Mr Habgood to a beefed-up role amid a series of challenges to the central bank's authority.

Mr Habgood is not a career banker, although he did serve on the board of National Westminster Bank prior to its takeover by Royal Bank of Scotland.

He is currently the chairman of two FTSE-100 companies: Whitbread, owner of the Costa Coffee chain, and Reed Elsevier, the academic publisher and event organiser.

Mr Habgood will succeed Sir David Lees, who has chaired the Bank of England's board, which is known as its Court, since 2009.

His arrival will come at a difficult time for the Bank, which said two weeks ago that it had suspended an employee as part of an investigation into its own role in the potential manipulation of foreign exchange markets.

The Bank's oversight committee subsequently announced that it had asked Lord Grabiner QC to lead a review on its behalf, which it hopes will allow it to overcome the perception that it has been slow to address critical governance issues.

The Court has nine independent directors, with the chair officially designated by the Chancellor.

Among the other members of the Court are Sir Roger Carr, the chairman of BAE Systems; John Stewart, chairman of Legal & General and Dave Prentis, general secretary of the Unison trade union.

The nature of the changes to the Court's role was unclear on Monday.

One source familiar with the changes said there would be a clear signal that Mr Carney was acknowledging the need for more robust oversight of the Bank of England's work.

Andrew Tyrie, the Conservative MP who chairs the Treasury Select Committee, has been a particularly vocal critic of the Court, telling the Financial Times this month that the Bank needed "a board worthy of the name".

Mr Carney is expected to announce a range of other reforms to the Bank of England's structure on Tuesday, including appointments aimed at more effectively integrating its regulatory and monetary policy powers.

Since assuming responsibility for regulating banks operating in Britain last year, the Bank has become an even more powerful decision-making body.

The Bank of England and the Treasury declined to comment.