Margareta Pagano: Bank of England needs to keep its brave maverick

If, as the noises off suggest, Paul Tucker is the next Governor, he has to persuade Andy Haldane to stay and maintain his fight against the system

It looks as if the Treasury is up to its old trick of feeding stories to the media to soften the blow; this time the leaks are over who will be the Bank of England Governor when Sir Mervyn King steps down next year.

Almost since the day the job came up for grabs, the bookie's choice has been Paul Tucker, the deputy governor. With his strong City backing; he's the insider's insider. Apart from a few flurries during the Libor scandal, Tucker has been odds-on to be crowned by the Chancellor, George Osborne, on 5 December when he presents the Autumn Statement.

That's why the report last week by the BBC's Robert Peston, that Tucker is the "favoured" insider after a survey of 10 senior regulators and bankers was so odd, particularly the bit which said the Treasury was aware of the City's views. As Bill Clinton would have said, let's orchestrate the momentum.

But, if Tucker does become Governor, there's one man he must keep on side – Andy Haldane, the Bank's director for financial stability, who sits on the crucial Financial Policy Committee. There are many who fear that should Tucker succeed, Haldane might leave: not out of pique – he's not that sort – but because the two do not always see eye to eye on the big issues.

That would be a tragedy, as Haldane is without question one of the UK's outstanding intellects. Since the financial crisis, Haldane is the only senior public servant who has persistently argued that the banking reforms don't go anywhere near far enough to prevent another disaster, including warning about the dangers of more quantitative easing.

In at least nine briliant speeches over the past year, Haldane has challenged the orthodoxy, whether it be asking why banks shouldn't be using fair value accounting to why crowd-funding is such a fascinating new source of finance. He's also causing a stir internationally. In one memorable speech – The Dog and the Frisbee – made at the Jackson Hole meeting of central bankers at the end of August, he caught the eye of many with his rather simple point that, despite decades of costly and cumbersome regulation, not one single watchdog caught the frisbee. So why, he asked, are regulators piling on more?

Haldane has also challenged plans to ring-fence retail banks, arguing that today's ring-fence is tomorrow's string-vest, which is why regulators should consider either doubling banks' loss-absorbing capital buffers to around 20 per cent or a full split between investment and commercial banking. Today's banks have become King Kong's again – Barclays and RBS are bigger than before the crash – and he would break-up those Too Big Too Fail because, ultimately, they are Too Big Too Care: $100bn is optimal.

But Haldane's most provocative contribution to public debate was last month's speech to an Occupy event. With chilling simplicity, he said the Occupy movement had been so successful popularising the problems of the global financial system "because they are right, not just in a moral sense but analytically too". This was a brave speech, and shows he's capable of taking on the banking lobby.

Privately, he also believes the Bank should play a more humble, conversational role in public life, explaining what and why it does what it does.

There are many – me included – who believe the Government should skip a generation and appoint the 45-year-old Haldane to the top job; at the least as a deputy governor. Youth is not a deterrent: Obsorne is 41, while Lord Cromer, a former governor, was 42 when he got the job.

Haldane may be as thin as a whippet but he's the only one inside – or outside – the Bank who has the guts to take on the banking beasts who will resist change until the day they drop. It's also why he is unlikely to get the big job.

So, Paul, ensure Andy stays.

BP seems, finally, to have drilled its way out of its legal black hole

Most of the world's oil and gas reserves, buried deep in the earth's crust, are covered by layers of salt deposits that have built up over the millennia and act like a lens, making it difficult to see what lies beneath. BP has the technology to peer through the lens to define the reserves – indeed, the Deepwater Horizon field in the Gulf of Mexico was discovered using such equipment.

It's an appropriate analogy for BP after a week in which the oil giant finally broke through the layers of litigation with two of the world's super-powers, Russia and the US; albeit at a whopping cost.

First, BP has settled with former AAR partners in TNK-BP, for $325m (£205m). Barring any last minute hiccups, so it can start afresh with its new Russian partners, Rosneft. Second, BP removed most of the US risk by paying a $4.5bn fine to the US to resolve all criminal charges and claims by the Securities and Exchange Commission over the Deepwater catastrophe, right.

BP has now paid around $36bn in fines but it's not quite out of hot water. There is one big trial to come in New Orleans in February. This is the Multi-Disciplinary Litigation being brought under the Clean Water Act to decide if BP was negligent, or grossly negligent, in the oil spill and how much water was damaged. BP will accept the lesser charge and is hoping to pay a fine of up to $1,000 on each oil barrel spilt rather than the $4,000 charged for gross negligence: the US estimates 4.9 million barrels were lost.

BP has set aside $3.5bn to cover these claims, taking total provision to $42bn. At last, investors can see through the salt to BP's reserves. It may just be time to buy BP again, down 2.07 per cent to 416.6p on Friday. Waiting for the next trial might be missing out.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected