Diplomat Cunliffe to Succeed Tucker as BOE Deputy HeScott Hamilton
Jon Cunliffe, a former adviser to U.K. Prime Minister David Cameron, was named deputy governor for financial stability at the Bank of England after a three-decade career as a civil servant.
Cunliffe, 60, succeeds Paul Tucker, who is leaving for Harvard University after losing out on the BOE governorship to Mark Carney last year. Currently the U.K.’s permanent representative to the European Union, Cunliffe will start at the central bank on Nov. 1, the Treasury in London said today.
The appointment gives the BOE a policy maker with years of experience of the EU at a time when the U.K. is repeatedly clashing with the bloc over financial-services rules ranging from short-selling bans to banker bonus curbs. Michel Barnier, the EU’s financial-services chief, warned the U.K. this month it can’t “pick and mix” its relationship with the EU and must accept rules governing the City of London in exchange for access to the union’s single market.
“He is the Treasury man through and through,” said Grant Lewis, an economist at Daiwa Capital Markets in London who worked at the finance ministry at the same time as Cunliffe. “But this is the deputy governor job that doesn’t necessarily require an economist. This is the one that is much more about financial stability, much more about negotiating with the EU and international bodies, which Jon knows intimately.”
The appointment was made by Queen Elizabeth II on the recommendation of Cameron and Chancellor of the Exchequer George Osborne and the new deputy will join the central bank’s Monetary Policy Committee. Two BOE policy makers who were seen as potential candidates for the job were Markets Director Paul Fisher and Executive Director for Financial Stability Andrew Haldane.
Cunliffe joins the BOE at a time of unprecedented change that included the appointment of Carney, the first foreigner to lead the institution in its 319-year history, and the addition of broad new powers to oversee the banking system. It has also added a third deputy governor for prudential regulation and is moving into new policy territory with forward guidance.
“Before the crisis, financial stability didn’t have any tools to achieve what it wanted,” said Rob Wood, an economist at Berenberg Bank in London and a former BOE official. “Now that side of the bank is much more important. It’s a very important role for the future.”
Both Carney and Osborne praised Cunliffe for his experience in financial and economic policy. As representative to the EU, he has been involved in negotiations on the region’s banking union. From 2007 to 2011, he was a U.K. government adviser on Europe and global economic issues, and before that worked in a number of roles in the Treasury.
“He brings an important European and international perspective,” Carney said in a statement. “That will be vital in ensuring that the Bank of England can shape both the U.K. and international financial systems so that they effectively serve the needs of the real economy.”
The chancellor said Cunliffe’s experience at the EU “will be instrumental in ensuring Britain’s financial services are well represented and protected.”
Tucker will leave the BOE on Oct. 18 and become a senior fellow at Harvard University with appointments at both the Harvard Kennedy School in Cambridge, Massachusetts, and Harvard Business School in Boston. He announced his plan to retire on June 14.
Charles Bean, the BOE deputy governor for monetary policy, is scheduled to leave next year. He agreed to extend his term by a year from July 1 to help with the transition period after Carney joined.