CITY AND SUBURBAN
Ticking towards Big Bang with whose hand on the detonator?
CHRISTOPHER FILDES
It seems only yesterday, that summer day when Cecil Parkinson and Nicholas Goodison joined hands on the detonator, and set off the chain of powder leading to Big Bang. Sir Nicholas remains, in his lonely eyrie high in the Stock Exchange Tower. Mr Parkinson has gone, nearly come back, gone away again: two succes- sors have come and gone: Mrs Thatcher's second Government is on its fourth Secret- ary of State for Trade and Industry. Those two original dynamiters had at least the appearance of a common purpose — even though Mr Parkinson believed that Stock Exchange members would still have to Choose between acting for clients and acting for themselves, while Sir Nicholas had begun to abandon that position within a matter of weeks. If there was misunder- standing then, are matters likely to have become clearer while the file was being passed to Norman Tebbit, Leon Brittan, and now to Paul Channon? It is probably in his in-tray somewhere under all those memoranda on Land Rover. Continuity, at one level down, lasted as long as Alex Fletcher, the junior minister concerned. Mr Fletcher took much trouble, went the rounds of the City, got to know and follow the players, and to City eyes seemed in his turn to be the man to follow. What the City missed was a scene deep in the murky recesses of the House of Lords, when poor Mr Fletcher trod on some eminent corns when trying to get them to pass the Insolvency Bill. When Mr Tebbit went to Central Office, Mr Fletcher went to the back benches, where he has been keeping himself warm, advising Jimmy Gulliver on his courtship of Argyll. His successor, Michael Howard, is conventionally rated a star pupil among the Commons's 1983 new b°Yx, and was the first to be given office. He. is a barrister, and the master of his bnef, but more than that is needed — as another able barrister, his erstwhile politic- al master Leon Brittan, could tell him. It is not as though there were only one brief. The Big Bang, the changing structure of ,VtY markets, and the Financial Services 1?.111, the changing structure of City regula- tion, are distinct and separate processes, though obviously they bear on each other. The markets after Big Bang will offer more rewards, throw up more risks, and require more safeguards. The question now being asked around the City is: whose hand on the detonator? The danger is of a free-for- all. The Securities and Investments Board, putative watchdog-in-chief, sees itself fit- ted out with teeth by the Committee on the Financial Services Bill, and is less than wholly pleased with the fit. The Board and its staff jib, for reasons of public policy and private preference alike, at anything which might make them indistinguishable from civil servants. On its own terrain, the Board has had at least one spectacular disagreement or misunderstanding with the Stock Exchange (over the international capital markets). That 'on one view is a healthy sign of the Board's independence, but the Exchange is to be one of the new Self-Regulating Organisations (and a mod- el for the others), and what will the noise be like once they all start to squeak up? The City's atavistic instinct is to look for a lead from Threadneedle Street. In the gilt-edged market, which the Bank of England manages on the Government's behalf, its reforming touch has been sure- handed. But the Bank likes to see itself as in the lead on a wider reform — the transformation of the City into an interna- tional marketplace for securities, playing in the world league along with New York and Tokyo, and bringing in foreign earnings to match what the City now earns from insurance and banking. The Governor took the initiative, ruthlessly putting down the Bank's pet Council for the Securities Industry, adopting instead the group under Sir Martin Jacomb which established to- day's base of self-regulation, and getting on affably with the Secretary of State, who at the time was Norman Tebbit. Then the blight of Johnson Matthey Bankers settled on the Bank, drawing its attention, weakening its influence, and finally dis- tracting David Walker, the Bank's director at the forefront of reform. Mr Walker became chairman of JMB. Now JMB has found a new owner, can the Bank recover its impetus and initiative? Or can we really expect it from Whitehall? It would be a pity to have to do without.
Previous page
