Sir George Blunden: Banker who helped avert financial crises

 

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The Independent Online

Within the Bank of England Sir George Blunden was for many years regarded as something close to indispensable, both an administrative mainstay and a calm operator in a crisis. As a high-level fixer he played an important role in dealing with many of banking's recurring crises, using his talents to calm and reassure the often nervy worlds of banking and the markets. Since none of the emergencies he helped deal with approached the scale of the banking problem of recent years his efforts were generally seen as successful. Perhaps this helped create a belief that banking was vulnerable to periodic bushfires rather than afflicted by deep-lying flaws in the system.

One of the tributes to him came from Brian Quinn, who like Blunden served as Deputy Governor. Describing him as "Bank of England through and through", Quinn said he was "truly one of the giants of the Bank of England who did much to shape this country's central bank over his long career."

His time at Threadneedle Street began in 1947, when he followed his father into the Bank. Born in Sutton, Surrey, he had been educated at the City of London School and served during the war with the Royal Sussex Regiment before attending University College, Oxford, where he took a degree in philosophy, politics and economics.

In his almost 40 years at the bank Blunden held a range of senior positions, establishing himself as a safe pair of hands, a reputation much prized in banking. His posts included deputy head of the discount office, head of the supervision division, chief of management services and deputy chief cashier. He also gained wider experience on secondments, first to the International Monetary Fund and later to the Monopolies Commission.

In the mid-1970s he was first chairman of the Basel Committee on Banking Supervision, sometimes referred to as the Blunden committee, which sought to set out global standards ofinternational oversight. As he put it, since a country's banking system was central to the management of its economy, its supervision would inevitably be a jealously guarded national prerogative. What was needed, he argued, was a more dynamic internalised approach with incentives for institutions andindividuals to engage in more risk-averse behaviour.

His first major bout of firefighting came in the early 1970s when he was called in to help cope with what he called "a problem of the possible collapse of confidence in the whole system." This involved the 1973 oil crisis, which in turn led to a collapse in the property market. Some smaller institutions which had been rash in their lending decisions were close to insolvency. He helped stave off disaster, and helped to put together a supervisory system aimed at avoiding a repetition.

He went into semi-retirement in 1984, stepping down as an executive director and, in line with tradition, joining the boards of major concerns such as Eagle Star and Grindlays Bank. But, in a departure from Threadneedle-Street precedent, a call went out for him in late 1985.

Volatility had manifested itself in the banking system with events such as the collapse of the Johnson Matthey bank and the Guinness takeover of Distillers. With the approval of Margaret Thatcher, Blunden was drafted back as Deputy Governor to restore order.

He took a stern line against a merchant bank involved in the Guinness takeover, later saying: "It was an unpleasant thing that we had to do but I have no doubt that it was right. It did a great deal to establish a more responsible and moral attitude in the City."

As the Bank's No 2 he helped calm the general sense of upheaval and improve confidence, working well with the Governor, Robin Leigh-Pemberton. "I can do anything I like now," he quipped to a journalist. "I have been brought back from the dead."

Knighted in 1987, he retired for asecond time in 1990 after spending four years as Deputy Governor. He wasactive in his retirement, picking upfurther directorships, becoming involved in charitable causes and chairing a committee on a proposed code of conduct for banks.

Warm tributes were paid to him by old colleagues, in particular Leigh-Pemberton, since ennobled as Lord Kingsdown. He recalled: "He'd retired and he came back as Deputy Governor, which was very good of him because we needed somebody with his experience. I was new to it and he was the most experienced man at the Bank of England when I was there, and we were able to turn to him with confidence to deal with any situation that arose. We knew that if he approved, it was likely to be the right answer."

Roger Cowe George Blunden, banker: born 31 December 1922; Deputy Governor, Bank of England 1986–90 (Executive Director 1976–84, non-executive Director 1984–85); Kt 1987; married 1949 Anne Bulford (two sons, one daughter); died 3 March 2012.

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