FORMER cabinet secretary Gus O’Donnell last night pulled out of the race to become the next Bank of England governor, hours ahead of the application process closing at 8.30am this morning.
Sir Mervyn King, the current governor of the Bank of England, will step down in June next year, and the Treasury has mounted an open applications process, after former chancellor Alistair Darling promised to advertise the job publicly.
Deputy governor Paul Tucker has consistently been touted as the frontrunner for the job, despite his association with the Libor scandal over the summer. Described by Darling as “one of the good guys,” financial commentator David Buik says Tucker is “well liked by all bank treasurers and very well connected in government. .
But Tucker’s recent links to the Libor investigations could count against him, as the Bank struggles to stem a tide of criticism against the banking sector.
O’Donnell told the Financial Times yesterday that he had other priorities: “You need a governor who desperately wants the job and is willing to serve eight years.”
With O’Donnell out of the running, Tucker’s closest rival is seen to be Lord Adair Turner, head of city watchdog the Financial Services Authority (FSA).
Also in the running are Sir John Vickers, academic and city economist, and chairman of the Independent Commission on Banking, and Glenn Stevens, governor of the Reserve Bank of Australia.
One of the less likely possibilities is The Sun’s business editor, Steve Hawkes, who has run a campaign based on consumer advocacy, managing to get himself endorsed by a Mervyn King – if not the Bank boss.
Hawkes promises “quantitative pleasing” instead of quantitative easing – and promises to give new cash to badly-off households, not banks, in his “funding for spending” scheme.
After a round of interviews, chancellor George Osborne and prime minister David Cameron will advise the Queen on a candidate to nominate for the role by 31 December.
Runners and riders in the Bank boss race
DEPUTY GOVERNOR OF THE BANK
The favourite, Paul Tucker was described as “one of the good guys” by Alistair Darling
LORD GUS O’DONNELL
FORMER CABINET SECRETARY
O’Donnell has said he will not apply to replace King as governor next year
LORD ADAIR TURNER
CHAIRMAN OF THE FINANCIAL SERVICES AUTHORITY
David Buik described Lord Turner as “too abrasive” but the regulator is in the running
BUSINESS EDITOR AT THE SUN
Steve Hawkes has been endorsed by Mervyn King – the darts player – not the current boss