UK: FSA makes surprise appointment as new chairman

Most of the supposedly smart money in the City was on Andrew Crocket moving from the Bank of International Settlements to chair the FSA. But this seemed somewhat unlikely just now: BIS is well into its Basel II work and Crocket has assumed the chairmanship of the Financial Stability Forum, succeeding in that post the outgoing FSA chairman, Sir Howard Davis. The Basel II programme add much to the question of stability of markets there is a nice fit with the overall thrust of UK and US policy which aims to move banks to a universal risk based approach, although there are some critics of this policy.
The UK Treasury has needed to look elsewhere. There were a number of names bandied about but the one that has surprised the City is Callum McCarthy. Currently, Chairman and Chief Executive of the Office of Gas and Electricity Markets (OFGEM). He has previously held senior positions in Barclays Bank, BZW and Kleinwort Benson as well as a number of civil service posts in the Department of Trade and Industry. It is not a full time appointment - he will be required to work only four days per week - but whilst, on the face of it, this is not a full week, he will still work more hours than his counterparts in many EU countries who are subject to an enforced 35 hour week - many in the City of London pass that target as they have their Wednesday afternoon cigarette break on a windy corner of an office block that refuses smoking privileges.

McCarthy has been looking for a new job since last May but has remained in his post at OFGEM despite signalling an intention to leave. His contract at OFGEM expired in October 2003 however, Davis has said he wants to leave as soon as possible to take up a position at the London School of Economics.

Front runners missing out were apparently Richard Broadbent (a former banker now at HM Customs and Excise) and Steve Robinson, formerly no. 2 at the UK Treasury.

In the civil service, McCarthy was Principle Private Secretary to Conservative minister Norman Tebbit when the latter was Secretary of State for Trade and Industry. Later, current Chancellor of the Exchequer Gordon Brown (who appointed McCarthy) was Shadow (opposition) Trade and Industry Secretary.