I’ve had a picture on my wall of the newly appointed Barclays chairman, Sir David Walker, for about 25 years. If that sounds creepy, I should explain that it’s a photograph of a 1986 meeting of the Court of the Bank of England, of which my father was a member. Walker, then an up-and-coming forty-something, was an executive director of the Bank and chairman of Johnson Matthey Bankers, which the Bank had bailed out two years earlier to avert a domino collapse across the City. Tall and bespectacled — taking his glasses off for photographers these days seems to me a mistake, giving him the mildly befuddled look of Corporal Jones in Dad’s Army — he was the sort of safe-pair-of-hands technocrat who was never quite Governor material but would go on to collect a huge list of senior financial assignments elsewhere.
The last time I bumped into him in the flesh was in October 2008 at a party in the Wallace Collection given by Morgan Stanley, the US investment bank to which he was ‘senior adviser’ either side of a short stint as executive chairman of the London arm. I recall the occasion most vividly for the fact that several of the front-line bankers and traders I spoke to seemed to think the banking crisis, then at its cataclysmic height, was just an opportunity to make more money out of market volatility.
We were all standing in the gallery where Poussin’s allegorical ‘Dance to the Music of Time’ hangs, and if the traders were the ones dancing merrily in a circle, Walker was the aged figure of Time who they barely seemed to notice playing his lyre alongside. I gather that his younger colleagues tended to regard him as a bufferish grandee; four years on, at 72, he will similarly struggle to find a rapport with the rump of Bob Diamond’s crew who still hold all the key posts at Barclays — though he would say that’s a challenge for the chief executive he must now swiftly proceed to hire, while he himself injects moral rigour from above and puts new backbone into a discredited board.
The truth is that, even if we accept the view of City veteran Sir Ronnie Grierson (still active at 92), that ‘age doesn’t matter when what you’re looking for is common sense’, Walker’s can only be a two- to three-year appointment at the outside. So stand by for yet another chairman search in due course — unless, of course, Walker turns out to be the last of the line, because the fate of the bank is to be split asunder. That, I suspect, might be the next chapter of the Barclays saga.
A wave to my old friend Adam Posen, the American economist whose three-year stint on the Bank of England’s Monetary Policy Committee ends next month. The committee’s traditional brief was to use changes in the official interest rate to keep inflation at or close to its 2 per cent target level, but having arrived in September 2009, Posen must have been surprised to find that the role was no longer that at all: bank rate stayed at 0.5 per cent throughout his tenure, while inflation doubled then halved again and the committee’s monthly debate was largely devoted to the merits of printing money via ‘quantitative easing’.
Posen emerged as the advocate for a more adventurous programme of QE, believing the device should be used to buy a wider range of financial assets than the Bank was prepared to contemplate in order to inject stimulus more directly into the economy. Indeed, his one regret about his MPC performance, he admitted last week, is that he stopped voting for more QE in April when he thought recovery was imminent, before realising that the double dip was upon us.
The Spectator has been consistently wary of QE, calling instead for supply-side and tax measures that would help the private sector lead us back to prosperity. But having taken a genial bashing from him on a couple of platforms, I salute Posen’s contributions to our public discourse — so much more lucid and authoritative than his waspish predecessor David Blanchflower, who succeeded only in sounding like a mouthpiece for Ed Balls — and the way he turned himself into an honorary Brit (often using ‘we’) for the duration of his stay.
Posen returns to Washington to become president of the Peterson Institute, formerly the Institute for International Economics, which changed its name to recognise its benefactor Pete G. Peterson, billionaire ex-chairman of the late lamented Lehman Brothers and founder of the Blackstone private equity group. Posen’s wife Jennifer Sosin, meanwhile, returns to her practice as a consultant on corporate reputational issues, notably for banks, pharma giants and food manufacturers — so she’ll be busy too. These parallel snippets suggest to me that financing thinktanks is good for financiers’ souls. How about a Bob Diamond Institute for Corporate Reputation: I’d like to be president of that one.
La France profonde
Adam Posen has been puzzling lately, as I have, over the contrast between dire UK GDP numbers and strong employment data. He would face the same conundrum if he joined me for a weekend of robust economic debate in the rural Dordogne. France has clocked up three consecutive quarters of zero growth, but that’s not the way it looks in the village of St Pompon, where the long-derelict épicerie is being rebuilt, a new bistro thrives, the bar has had a facelift and the thronged Saturday-night marché gourmand nocturne rivals the Olympic closing ceremony for conviviality. The only dampener is the Dutch, who are here in force but (I’m sorry to say, being distantly related to them) have the reputation of spending as little as possible. The Spectator, on the other hand, is doing its bit for trickledown: my own annual musical soirée was well received, though it was upstaged by Lord Sumption’s opera company at his chateau up the road, while another books-page regular, Frederic Raphael, has been spotted holding court in the best local restaurant. And the sun shines gently, day after day.