Outlook Few had even heard of Mervyn Davies before he became chief executive of Standard Chartered in 2001. Before that, he was the largely anonymous face of Standard Chartered in Hong Kong and before that he was an unknown Citigroup foot soldier, albeit of officer class. His rise to public prominence since then has been meteoric and today he's known as the banker who managed to escape the credit crunch, one of the few City stalwarts you would still want to be seen dining out with.
In any case, he's been advising the Government in various capacities for some years now so presumably knows what he is letting himself in for. New Labour has always been in awe of the supposed "can do" attributes of business and the City. It helps the Government's pro-business credentials to recruit from these talent pools. The track record of such transplants has not been an entirely happy one. One of the first to make the transition was David Simon, former chief executive of BP, who perhaps naively thought the new Government pro-European and therefore capable of being persuaded to adopt the euro. Disillusioned, he resigned a couple of years later. David Sainsbury, former chairman of J Sainsbury, seemed to have a better time as science minister, but he too threw in the towel.
As for Diggers, Mervyn Davies's predecessor as minister for trade, he simply found it impossible to keep his mouth shut, repeatedly managing to slag off key elements of Government policy. There is also the faintly awkward fact that Paul Myners, another City bigwig, has already been recruited to the Treasury with a view to helping out on the banking crisis. Obviously, there is potential for conflict.
Yet these are extraordinary times and although the precedents may not bode well, Mr Davies has the experience, contacts and knowledge to make a real difference. He's also one of the few people in Britain today to have witnessed the Asian financial crisis of the late 1990s first hand. He knows better than any that to survive you must adapt. To respond to the crisis with pre-conceived ideas and remedies is doomed to failure.
Multiple different solutions are required in addressing the implosion, from recapitalisation, to taking the bad assets off the bankers' balance sheets, to getting the securities markets moving again. Mr Davies's appointment also provides the City with a formidable spokesman at the heart of government. In addressing regulatory reform, it is vital that the Government avoids the temptation to over-react, which would be disast-rous for London and its position as one of the world's major financial centres. Mr Davies can be relied on to ensure that the Government gets the balance right, and that free-trade, non-protectionist policies remain at the centre of the Government's domestic and international agenda.
The nation's gain is Standard Chartered's loss. As an emerging markets bank, Standard Chartered has glided through the credit crunch comparatively unscathed, yet this is more than just luck. Standard Chart-ered is a remarkably well run bank. Finding a successor is not going to be easy. Mr Davies's contact book of Asian political leaders, international business tycoons and top-notch financiers is unrivalled, and it is in any case quite hard to point to another banker of his calibre who is entirely untainted by the present crisis.
In the end, his successor as chairman may therefore have to be an internal appointment. Standard Chartered has earned its right not to be hide bound by what in other banks has proved largely worthless corp-orate governance convention. Why not just make Peter Sands, who has already proved himself an outstanding chief executive, the executive chairman?