Financial Services Authority Chairman Adair Turner signalled his interest in succeeding Mervyn King as Bank of England governor and set out a plan to reform the management culture in banking.
“I would obviously not rule myself out” Turner said in an interview in London today, when asked about taking over when King’s term ends in June. “It is something I’ll have to think about when the time comes.”
Turner, who has been FSA chairman since 2008, is seen as one of the frontrunners for the Bank of England job. In a separate Bloomberg Television interview, he said keeping a check on the central bank chief will be “very important” given the expanded powers the institution is getting over bank regulation.
Turner’s chances of succeeding King have increased this month, according to bookmaker Paddy Power Plc. His odds to replace King have improved from 9-2 to 7-2, while those of Deputy Governor Paul Tucker have widened to 5-2 from 9-4.
Asked if he would apply for the role, Turner said the “challenges of the moment are sufficient to keep me very busy.”
“They continue to mount with the challenges of the euro zone, the challenges of the FSA transition, the challenges of Libor,” he said in the interview. “The most intelligent thing to do is focus on the immediate challenges and make decisions on the future when and if they have to be made.”
Tucker also laid out a plan to rebuild trust in financial services following the Libor scandal that led to a record 290 million-pound ($450 million) fine for Barclays Plc and cost Chief Executive Officer Robert Diamond his job. He said banks’ executives should review their use of complex financial products and focus on the interests of consumers.
“If the top management and board of a retail bank observes that it is making huge profit margins on an ancillary product sold by a commission-incentivized sales force: what does it do?” Turner said earlier at a speech at Bloomberg’s offices in London. “Congratulate the sales teams and increase the targets, or ask searching questions about whether the product is truly in consumers’ interest.”
Libor is derived from a survey of banks conducted each day on behalf of the British Bankers’ Association in London. Lenders are asked how much it would cost them to borrow from one another for 15 different periods, from overnight to one year, in currencies including dollars, euros, yen and Swiss francs. After a set number of quotes are excluded, those remaining are averaged and published for each currency by the BBA before noon.