Sir Nigel Rudd agrees to second term as BAA chairman
Corporate grandee Sir Nigel Rudd has been asked to stay on for a second three-year term as chairman of BAA. Sir Nigel took on the chairmanship of the UK's airports operator, owned by Spain's Ferrovial group, in September 2007, and has overseen a troubled period including the completion of Terminal 5, the forced sale of Gatwick airport and the failed attempt to build a third runway.
Sir Nigel said, in an interview with The Independent on Sunday, he will stay on for a second-term: "It's a fascinating company which still has much work to do in upgrading the other terminals and making sure its stays one of the world's leading airports.
On Heathrow's expansion plans, he said: "BAA accepts the Government's decision to stop the third runway." However, privately the BAA chairman believes the Government will soon realise it has made a mistake as Heathrow is losing out at as an international hub to Schiphol and Paris: "It's already happening," he said.
Sir Nigel, who was deputy chairman of Barclays Bank until April last year, is also critical of the Financial Services Authority, for its role in the financial crash, questioning why the regulator didn't stop Royal Bank of Scotland's bid for ABN Amro which destroyed its balance sheet and would have done, even in benign economic conditions: "Why the authorities at the FSA allowed this to happen will be a question asked for many years go come."
He also asks why the FSA didn't see trouble brewing at Northern Rock, as Barclays looked at the lender to see if a bid would create value, but that a risk assessment showed its business model to be unsustainable. "The failure of regulation is the primary reason for the collapse of the financial markets on both sides of the Atlantic. By instinct, I'm a free marketer and regulation always impinges on markets. But for obvious reasons, monopolies or near monopolies have to be regulated in the consumers interest."
Finding out why bank regulators didn't spot the trouble is crucial to making sure it doesn't happen again, he said, and the decision to return banking supervision from the FSA to the Bank of England is a positive one.
Sir Nigel also hits out at the quality of the FSA's regulators – apart from those at the top. "In the past, as soon as banks spotted a talent in the FSA they poached them." To improve the quality of banking supervision, Sir Nigel recommends that all managers who sit on executive committees on banks should be seconded to spend at least one to two years with the regulator: "It will take several years to work through but every 40-year-old high flyer would know that this was a part of the career progression – this experience would embed real risk awareness at the heart of our financial institutions."
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