HSBC: Is Clara Furse the right person to chair its retail bank? Depends which Clara Furse turns up in the boardroom

The former chief executive of the London Stock Exchange showed she has what it takes while running that company. But her record isn't spotless

James Moore
Tuesday 01 November 2016 18:11
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Clara Furse will chair HSBC's ring fenced retail bank
Clara Furse will chair HSBC's ring fenced retail bank

By James Moore

Would the real Clara Furse please stand up?

The former chief executive of the London Stock Exchange has just been appointed to chair HSBC’s Birmingham based ring fenced bank.

It’s a new kind of role in corporate Britain that involves overseeing a bank within a bank. The ring fence was designed to ensure that retail banks that hold deposits for, and lend money to, retail consumers like you and me don’t get tripped up as a result of their parents’ more risky activities causing them trouble.

Ms Furse is certainly qualified for the role. She has the requisite CV, having undertaken several senior roles and sat on the boards of a variety of companies. She has just stepped down as a member of the Bank of England’s Financial Policy Committee.

But would she be willing to stand up and be counted were it to prove necessary? Say, in the event of any difficulties between the ring fenced bank she will be chairing and its parent?

Her tenure as chief executive of the London Stock Exchange suggests that she would. During her time there, she fended off a succession of bad bids for the company, that had the potential to seriously damage the City of London.

She also had to put up with the misogyny of the old City, which couldn’t quite get its head around having a woman at the head of an institution where memories of the old stockbrokers’ club, that it was prior to demutualisation, lingered long.

It is true that, by the end of her tenure, there was something of a bunker mentality operating at the company’s upper levels. Some good people found themselves jettisoned, and Ms Furse perhaps needlessly nettled a few people who meant her no harm.

That said, someone who could emerge standing after putting up with the best (or should that be the worst) that the City of London and a string of rival exchanges could throw at her is just the sort of person you’d hope would ensure the ring fenced part of a wider banking group is kept safe and sound.

Ah, but, hang on just as second. On the other hand, this is the same Clara Furse who sat on the risk and capital committee of Fortis. Fortis was a Belgian Dutch financial services group that bought part of Dutch bank, ABN Amro in 2007, as part of a break up consortium also involving Spain’s Banco Santander and, of course, Royal Bank of Scotland.

We all know what the result of that deal was. While Santander got the best bits and emerged smiling, RBS had to seek a bailout from the UK taxpayer while Fortis was itself broken up and rescued by the three Benelux governments. It is for this reason that her appointment has, shall we say, raised eyebrows in a few quarters.

If all goes well at HSBC, and at the shiny new Birmingham based HSBC UK, it won’t matter. We won’t have to find out which of the two Clara Furses is the real one.

Best just keep those fingers crossed then.

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