COMMENT : The key questions about Sir Chips and Regan

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Can Sir Chips Keswick hope to survive either as chief executive of Hambros or as a director of the Court of the Bank of England? Since the question is being much asked both in and outside the City in the wake of the Andrew Regan fiasco, it seems reasonable to try and answer it. The second part is the easier one to address. Even if the Bank felt minded to get rid of him, it could not do so for the time being unless he is shown to be of "lunatic or unsound mind", has been "continuously absent for six months", gone bankrupt or is convicted of an offence. So speaks the 1946 Bank of England Act. Sir Chips may be many things, but lunatic or of unsound mind he is not.

He could, of course, be prevailed upon to resign, but even this seems unlikely, at least until the outcome of the Norton Rose inquiry into Hambros' role in the affair is known. While there is a theoretical conflict of interest in his position, since the Bank of England is Hambros' ultimate regulator, this is satisfied by virtue of the fact that the Bank has accepted that the Norton Rose inquiry is for the moment sufficient action.

If the findings of the investigation are adverse, then plainly Sir Chips' position at the Bank of England would be in jeopardy; he would also almost certainly have to go at Hambros. As always in these affairs, the key questions are: did Sir Chips know, and if he didn't, should he have known? Did he know, as chief executive of Hambros, that the bid for the Co-op was being constructed on the basis of stolen documents, and if he didn't know, why not?

We can only presume that the answer to the first question is that he didn't know, for up until the time of his public apology, Sir Chips had repeatedly backed his client and said that everything was above board. The more intriguing question is whether he should have known. Could his apparent failure to get to the bottom of these matters in any way be considered negligent? This is much more difficult territory. It is already clear that this is not an open and shut case, that although Mr Regan and some immediate aides knew where the information came from, others, some of whom received only summaries of what was in the documents, did not.

All these things are matters of fine judgement. Like the rest of us, Norton Rose is not going to find it easy to call. What is certainly true is that Sir Chips acted honourably and quickly once he realised the full extent of what had happened. He deserves some credit for that at least.

What is also certainly true is that even if he emerges reasonably well from the report, he, and most of the rest of the Court of the Bank of England, are not going to have their contracts renewed by Labour. All 18 directors of the Court are government appointments. Most of them will find themselves as unacceptable to New Labour as they would have been to Old. Why, two of them even signed the business leaders' open letter to the Daily Mail saying Labour couldn't be trusted. As their contracts expire, virtually all the non execs, Sir Chips included, will be cleared out, to be replaced by more Labour-leaning people. In the absence of lunacy or legislation, however, it's going to take some time. Sir Chips' contract doesn't expire until 28 February 2001.

De Silguy spoke the truth about G3

Rule Britannia! Britannia rules the waves! Britons never, never, never shall be excluded from the G7!

As a rallying cry, it leaves a lot to be desired. Yet politicians of all flavours rushed to condemn Yves-Thibault de Silguy when he suggested that the UK will be squeezed out of the inner circle of international economic management after the start of the single currency. John Major accused the EU's monetary affairs commissioner of being "absurd and arrogant". Tony Blair said it was just not going to happen.

Coming at the tail of an election campaign awash with symbols of bulldogs and lions, this jingoistic reaction should have come as no surprise. But the two party leaders are both mistaken. Mr de Silguy, although French, was neither arrogant nor wrong. The club of rich industrial nations, a completely informal grouping, will inevitably evolve into a G3 after the start of the single currency.

In fact, there is already an inner cabinet consisting of the US, Japan and Germany. Theirs are the world's three main reserve currencies. When the euro exists, there will be even less need to pay attention to fringe currencies like sterling. It will be more important to include Russia - likely to be formally invited to turn the G7 into a G8 at this summer's summit in Denver, than the UK. Or is that going to be a G4 if Canada, Italy and the UK are to be left out?

Britain's influence will be squeezed from below, too, as a growing number of big, newly industrialised economies such as Korea, China, Brazil and even our former colony, India, take their place on the international stage. These increasingly important economic powers are already playing a bigger role in the International Monetary Fund and the Bank for International Settlements. They are likely to want their own G number.

The veteran City economist Stephen Lewis at London Bond Broking points out that the geometry of international meetings has always been variable. The G7 was a G5 until the Italians made a big enough fuss about having overtaken the British economy in size. In practical terms, he argues, it makes no difference - the politicians discuss what they have to discuss with whoever they want or need to on the circuit of international meetings. Flag-waving over G7 membership will not by itself give the UK influence in the inner circle. Mr de Silguy may have been unwise to irritate matters yet further in relations between Britain and Europe, but he speaks the truth and his remarks highlight a key element of the debate over monetary union. If we stay out, we'll be marginalised, not just in Europe, but in the world too.

Can Ecclestone really own this sport?

Formula One was always going to be a problematic stock market flotation. Its delay raises questions about whether it was ever really possible. What is Formula One and who actually owns it? Bernie Ecclestone is sole owner of the company called Formula One, he organises the events, markets them and sells the TV rights. But he didn't invent the sport, nor does he own it.

Without the teams, or constructors as they are known in the jargon, Formula One would be nothing. They, after all, are the people that stage the crashes. A good number of them said, "Over our dead bodies", when they first read that Mr Ecclestone was planning to capitalise on his position through a pounds 2.5bn stock market flotation.

Some problems have been overcome. A new agreement has been hammered out covering division of TV revenue. But this hasn't solved the core issue, which is ownership of the sport itself. Over the years Mr Ecclestone has built himself a very powerful position within the sport. He certainly controls it. But is it really his to sell?