Adair Turner was confirmed as the new chairman of the beleaguered Financial Services Authority yesterday. Lord Turner of Ecchinswell, who is one of the Government's favourite fixers and served as the head of the Confederation of British Industry, will take over from Sir Callum McCarthy in September.
Sir Callum, who will have served for one five-year term, has faced sharp criticism for the City regulator's handling of the Northern Rock affair and the credit crisis. He made it clear some time ago that he was not seeking a second term.
Lord Turner was appointed by the Chancellor of the Exchequer, Alistair Darling. He is contracted to work three days a week, the standard workload for a chairman in the private sector, but one day fewer than Sir Callum. The Treasury said the three-day figure was not cast in stone and that Lord Turner would do what the job required.
The former McKinsey partner will be thrown into decisions about how to prevent a repeat of the financial meltdown that hit the UK and other markets last summer. The FSA is fighting a turf war with the Bank of England over responsibility for banking regulation and will also have to take on the financial sector to impose new standards.
Simon Gleeson, a partner at the law firm Clifford Chance who specialises in financial regulation, said: "Everybody is in favour of better risk controls, more transparency and better management systems. The challenge for the regulator is to turn those principles into specifics. What are you asking them [banks] to do next time?"
Lord Turner has worked for the Government before as chairman of the Low Pay Commission and the Pensions Commission. In the second role he took on Gordon Brown, who was then Chancellor, to push through reforms that Mr Brown opposed.
He has non-executive directorships at Standard Chartered, the Asia-focused bank, and Paternoster, the bulk annuity insurer. He is expected to stand down from both these positions.
The Treasury said he would be paid in line with Sir Callum's £434,000-a-year salary. Lord Turner, who headed the CBI between 1995 and 2000, is said to have beaten off other candidates, including Bob Wigley, head of Merrill Lynch's Europe operations.