Ex-CBI chief lined up for finance watchdog

May 28 2008 by Alex Turner, Liverpool Daily Post

THE Government is seeking to improve its standing with the business community with the appointment of former CBI director general Adair Turner as chairman of the Financial Services Authority (FSA).

Reports have claimed that Lord Turner – who has long been linked with the post – will be confirmed in the role shortly by Chancellor Alistair Darling. He will replace Sir Callum McCarthy, who will retire as FSA chairman in September, after five years.

It was the failure of the FSA in spotting Northern Rock’s problems that started the recent collapse in confidence in the Government’s ability to manage the economy, which has since been further exacerbated by the continuing global economic problems.

Lord Turner, whose appointment could be confirmed within the next week, will have the job of improving the City watchdog, which is in charge of policing UK banks.

The FSA’s three stated aims are to promote efficient, orderly and fair markets, to help retail consumers achieve a fair deal, and to improve business capability and effectiveness.

But it was heavily criticised after it admitted failures on its own part following an internal review into the Northern Rock debacle. Its poor handling of the problems at Britain’s fifth-largest mortgage lender, which was eventually nationalised by the Government, was an embarrassment for the FSA in its biggest test in its eight-year history.

As well as repairing the FSA’s beleaguered reputation, the new chairman will have to be a skilled negotiator to work with the Bank of England and the Treasury while monitoring the financial sector.

The position will be a big job, and Lord Turner is already a busy man. He is currently chairman of the Government’s committee on climate change, as well as holding a number of directorships, including Standard Chartered and United Business Media.

The chairmanship of the FSA was, under Sir Callum, a four-day-a-week role, but this is likely to be reduced to three days.

A management consultant by training, Lord Turner has also worked for oil giant BP, as well as banks Merrill Lynch and Chase Manhattan. He headed the CBI from 1995 to 1999, where he gained the nickname “Red Adair” for appearing to move the CBI towards Labour.

He also has political experience after heading the Government’s Pensions Commission between 2003 and 2006, and the Low Pay Commission between 2002 and 2006. He was ennobled by Tony Blair in 2005.

A spokesman for the Treasury, which is overseeing the recruitment process, declined to comment on the likelihood of Lord Turner’s appointment.

Other names mentioned as possible successors to Sir Callum include Merrill Lynch Europe chairman Bob Wigley, Cabinet Secretary Sir Gus O’Donnell and the former chief executive of Halifax Bank of Scotland, Sir James Crosby – who has, however, ruled himself out of the running.

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