Sir Paul Tucker
Deputy Governor of the Bank of England for Financial Stability
In office
March 2009 – October 2013
Governor
Preceded byJohn Gieve
Succeeded byJon Cunliffe
Member of the Monetary Policy Committee
In office
June 2002 – October 2013
Governor
Member of the Financial Policy Committee
In office
April 2013 – October 2013
Governor
Personal details
Born (1958-03-24) 24 March 1958
Alma materTrinity College, Cambridge
ProfessionEconomist
Websitepaultucker.me

Sir Paul Tucker (born 24 March 1958) is a British economist, central banker, and author. He was formerly the Deputy Governor of the Bank of England, with responsibility for financial stability, and served on the Bank's Monetary Policy Committee from June 2002 until October 2013[1] and its interim and then full Financial Policy Committee from June 2011.[2] In November 2012 he was turned down for the position of governor in favour of Mark Carney. In June 2013, Tucker announced that he would leave the Bank of England,[3] and later that he would be moving to Harvard.[4] He was knighted in the 2014 New Year Honours for services to central banking.[5] His first book, Unelected Power, was published in May 2018 and his second book, Global Discord was published in November 2022.

Early life

Tucker was educated at Codsall High School, Wolverhampton, and graduated from Trinity College, Cambridge, where he studied maths and philosophy.[1][6]

Central Banking career

Tucker joined the Bank of England in 1980.[7] From 1980 to 1989 Tucker worked in banking supervision; in corporate finance at a merchant bank; on reforming Hong Kong following the 1987 crash, and then the UK's wholesale payments system, leading to the introduction of real-time gross settlement. He was Principal Private Secretary to Robin Leigh-Pemberton, Governor of the Bank of England, for nearly four years until 1993.

Tucker became Head of Gilt-Edged & Money Markets Division in mid-1994, during a period of reforms in the money markets. He was Head of Monetary Assessment and Strategy Division 1997–1998, responsible for assessing UK monetary conditions and issues concerning the monetary framework. From January 1999, he was Deputy Director of Financial Stability, and was closely involved with the Bank's Financial Stability Review. From 1997 to 2002, he was also on the Secretariat of the Monetary Policy Committee, preparing the published minutes.

Appointed Policymaker

Starting in June 2002, he became Executive Director for Markets, with responsibility for (i) the Bank's implementation of monetary policy and the management of its balance sheet more generally, including management of UK's foreign currency reserves; and (ii) for market intelligence and analysis supporting the Bank's monetary and financial stability core purposes.[1] At the same time he was appointed a member of the Bank of England's Monetary Policy Committee and Executive Director for Markets from June 2002.[8] While on the monetary committee, he voted in a minority seven times.[9][10] He has been described as trying to break down silos between different parts of the central banking during this period.[11] That theme had featured in various speeches before the financial crisis focusing on financial innovation, the monetary aggregates, and stability.[12][13]

He was reported as having pushed for a more active response to the liquidity crisis.[14]

He was appointed as Deputy Governor of the Bank of England with effect from March 2009. In this capacity he was closely involved in framing and implementing the extension of the central bank's formal responsibilities and powers into micro and macro-prudential supervision of the financial system, following the financial crisis of 2007–2009.[15]

A July 2012 memo submitted to the Treasury Select Committee and released by the Wall Street Journal suggested that Tucker may have implicitly pressured Barclays to manipulate its Libor submissions by relaying a message from senior members of the UK government that "it did not always need to be the case that [Barclays] appeared as high as [Barclays] has recently."[16][17] The memo also noted that Diamond did not believe he received an instruction from Tucker.[18] In August 2012, the Treasury Select Committee noted in its report into Libor that the conclusion of the Financial Services Authority was that "no instruction for Barclays to lower its LIBOR submissions was given during this telephone conversation", but that "as the substance of the telephone conversation was relayed down the chain of command at Barclays, a misunderstanding or miscommunication occurred" so that "Barclays' Submitters believed mistakenly that they were operating under an instruction from the Bank of England".[19][20] The U.S. Department of Justice and the U.S. Commodity Futures Trading Commission also came to similar conclusions following their investigations.[19][21][22]

During this period, Tucker spoke frequently about future risks to stability from shadow banking and clearing houses.[23] [24] [25] While on the Financial Policy Committee, Tucker also argued against the Bank of England being granted powers to intervene in the housing market for its own sake, as that would be highly political, contrasting that with powers that were needed to ensure the resilience of the financial system.[26][27]

International Central Banking

While Deputy Governor of the Bank of England, Tucker became a director of the Bank for International Settlements,[28] and later also chaired the Basel-based Committee on Payment and Settlement Systems (CPSS).[29] During this period, he was a member of the Steering Committee of the G20 Financial Stability Board ("FSB").

In 2009 Tucker became the first chair of the FSB's Working Group on Cross-Border Crisis Management.[30] According to the British Bankers Association, Tucker was “one of the first to set out thinking on ways to deepen the resolution regime”, in particular to develop "a super special resolution framework that permitted the authorities, on a rapid timetable, to haircut uninsured creditors in a going concern”.[31] Tucker helped to develop the conceptual architecture of bail-in, and also got the FSB and G-20 behind the proposal.[32] In October 2011, the FSB Working Group published the "Key Attributes of Effective Resolution Regimes for Financial Institutions". This document set out core principles to be adopted by all participating jurisdictions, including the legal and operational capability for such a super special resolution regime (now known as 'bail-in').[33] In late 2012, Tucker co-authored an op-ed with FDIC Chairman Martin Gruenberg that described how different countries should cooperate on the resolution of a cross-border bank.[34]

Systemic Risk Council

From December 2015, two years after leaving office, until August 2021, Tucker was chair of the Systemic Risk Council, a body set up in 2012 by former regulators and central bankers to promote financial stability.[35] Its first chair was Sheila Bair, former Chair of the FDIC,[36] and its members included Paul Volcker (former Chair of the Federal Reserve)[37] and Jean-Claude Trichet (former President of the European Central Bank).[38] While Tucker was chair, in early 2017 the SRC issued a statement to G20 Finance Ministers and Governors on financial reform[39] which it refreshed in the run up to the November 2020 US Presidential election, highlighting outstanding issues.[40] Amongst other things, the SRC has intervened on various Trump US Treasury proposals to roll back financial regulation, and on the need for a policy on the resolution of clearing houses without taxpayer bailouts.[41][42][43] It was critical of various Federal Reserve relaxations on the grounds they left the system less resilent.[44]

Shortly after the 2019 outbreak of the Covid pandemic, the Systemic Risk Council issued a statement addressed to the G20 on how the economic and financial authorities should respond, including credit facilities, and urging suspension of banks’ dividends, share buy backs and top-end bonuses, which the EU but not US followed.[45]

Continued Involvement in Monetary Issues

Tucker has continued to speak and write about monetary policy and financial stability. Shortly after leaving office, he set out views on the program to reform the financial system, at an event held by the Washington D.C. Brookings think tank's Hutchins Center to mark the retirement of Federal Reserve chairman Ben S. Bernanke.[46] He co-authored advice to the International Monetary Fund on how to address countries' external financing and other risks.[47]

Tucker's analysis of the lender of last resort function has been published by the Bank for International Settlements and quoted extensively in a leading US textbook on the law of financial regulation.[48][49] In late 2020, Tucker published proposals for reforming financial regulation so that all issuers of instruments treated as safe by customers, investors and traders (shadow banks as well as banks) have to carry sufficient assets to cover 100% of their short-term liabilities by borrowing secured at the central bank.[50]

In November 2018, Tucker was elected President of the UK's National Institute of Economic and Social Research.[51]

In February 2021 testimony to a UK House of Lords committee on quantitative easing, Tucker was critical of the way the different purposes of central banks purchasing government bonds had blurred, highlighting that market-maker-of-last resort was important but not regular monetary policy, and expressing concern about the effect of massive QE on the interest rate-sensitivity of government debt-servicing costs.[52]

Other Post Central Banking Activities

Since late 2013, Tucker has been a Fellow[53] at the Harvard Kennedy School's Mossavar-Rahmani Center for Business and Government. He is a Senior Fellow at Harvard's Center for European Studies.[54]

Following the 2016 referendum on European Union membership in the United Kingdom, Tucker co-authored a paper with Jean Pisani-Ferry, André Sapir, Norbert Rottgen and Guntram Wolff which lays out a proposal of a "continental partnership" between the EU and the UK.[55] According to the paper, such a partnership would grant Britain some control over labor mobility while preserving free movement of capital, goods and services [56]

Tucker's first book, Unelected Power: The Quest for Legitimacy in Central Banking and the Regulatory State, was published in May 2018 by Princeton University Press.[57] It has been described as "rang[ing] with great erudition and clear logic across political philosophy, economics and public law to reconstruct from the ground up the case for the legitimate exercise of unelected power in a modern representative democracy."[58]

His second book, Global Discord: Values and Power in a Fractured World Order, was published in November 2022 by Princeton University Press.[59]

References

  1. 1 2 3 Bank of England. "Profile of Paul Tucker". Archived from the original on 10 June 2011. Retrieved 12 June 2011.
  2. ↑ "Financial Policy Committee: what it does and who is in charge". The Daily Telegraph. 29 May 2011. Archived from the original on 30 June 2009. Retrieved 12 June 2011.
  3. ↑ Heather Stewart (14 June 2013). "Deputy governor Paul Tucker quits Bank of England". The Guardian. Archived from the original on 30 June 2009.
  4. ↑ Philip Aldrick (19 October 2013). "American dream in Tucker's future". The Telegraph.
  5. ↑ "No. 60728". The London Gazette (Supplement). 31 December 2013. p. 2.
  6. ↑ Birmingham Post. "Staffordshire man named as new deputy at Bank of England Dec 12 2008". Archived from the original on 30 June 2009. Retrieved 2 July 2012.
  7. ↑ Chris Giles; Brooke Masters; Patrick Jenkins (17 April 2012). "Favourites line up for beefier BoE". Financial Times. Archived from the original on 30 June 2009. Retrieved 18 April 2012.
  8. ↑ "Appointments at the Bank of England" (PDF) (Press release). Bank of England. Retrieved 3 January 2022.
  9. ↑ "Monetary Policy Summary and Minutes". Bank of England. Retrieved 3 January 2022.
  10. ↑ "BOE's Paul Tucker Was Doubly Unlucky". Wall Street Journal. 14 June 2013.
  11. ↑ Tett, Gillian (2015). The Silo Effect. London: Little Brown. pp. 107–135, 248–249.
  12. ↑ Tucker, Paul (11 December 2006). "Macro, Asset Price and Financial System Uncertainties" (PDF). Bank of England. Retrieved 10 December 2019.
  13. ↑ Tucker, Paul (26 April 2007). "A Perspective on Recent Monetary and Financial System Developments" (PDF). Bank of England. Retrieved 10 December 2019.
  14. ↑ Nixon, Simon (14 June 2013). "BOE's Paul Tucker Was Doubly Unlucky". Wall Street Journal.
  15. ↑ Kynaston, David (2017). Till Time's Last Stand: A History of the Bank of England 1694--2013. London: Bloomsbury. pp. 773–776.
  16. ↑ Written Evidence (PDF). Fixing LIBOR: some preliminary findings.
  17. ↑ Barclays file, obtained by Wall Street Journal, Supplementary information regarding Barclays settlement with the Authorities in respect of their investigations into the submission of various interbank offered rates
  18. ↑ House of Commons Treasury Committee. "Fixing LIBOR: some preliminary findings" (PDF).
  19. 1 2 House of Commons Treasury Committee (12 August 2018). "Fixing LIBOR: some preliminary findings: Second Report of Session 2012-2013" (PDF).
  20. ↑ Financial Services Authority. "FSA Final Notice to Barclays" (PDF).
  21. ↑ "Appendix A" (PDF). Department of Justice. 26 June 2012. Retrieved 30 March 2018.
  22. ↑ "ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTIONS 6(c) AND 6(d) OF THE COMMODITY EXCHANGE ACT, AS AMENDED, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS" (PDF). CFTC. Retrieved 30 March 2018.
  23. ↑ "SHADOW BANKING, FINANCING MARKETS AND FINANCIAL STABILITY". Retrieved 3 March 2020.
  24. ↑ "Clearing houses as system risk managers". Retrieved 3 March 2020.
  25. ↑ "Shadow banking: thoughts for a possible policy agenda". Retrieved 3 March 2020.
  26. ↑ "Stability comes before the good things in life". Financial Times. 5 April 2012.
  27. ↑ "Record of Financial Policy Committee Meeting held on 16 March 2012" (PDF). Bank of England. 28 March 2012.
  28. ↑ "Organisation, activities and financial results" (PDF), BIS 79th Annual Report, Bank of International Settlements, 2009, p. 147, retrieved 6 April 2018, By letter dated 23 April 2009, Mervyn King, Governor of the Bank of England, appointed Paul Tucker, Deputy Governor of the Bank of England, as a member of the Board of Directors for the remaining period of Lord George's term of office ending on 6 May 2011.
  29. ↑ "Paul Tucker appointed CPSS Chairman" (Press release). Bank of International Settlements. 5 March 2012. Retrieved 6 April 2018.
  30. ↑ FSB (27 June 2009), Financial Stability Board holds inaugural meeting in Basel (PDF), archived from the original (PDF) on 6 April 2018
  31. ↑ British Bankers Association (August 2010), Resolution and unsecured creditors
  32. ↑ Risk Magazine (13 January 2014), Lifetime achievement award: Wilson Ervin
  33. ↑ Financial Stability Board (October 2011), Key Attributes of Effective Resolution Regimes for Financial Institutions (PDF)
  34. ↑ Martin Gruenberg and Paul Tucker (10 December 2012). "When global banks fail, resolve them globally". Financial Times. Archived from the original on 18 November 2017.
  35. ↑ "Paul Tucker to Succeed Sheila Bair as Chair of Systemic Risk Council". The Systemic Risk Council. Retrieved 8 December 2015.
  36. ↑ "Sheila Bair to lead private financial risk council". The Systemic Risk Council. Retrieved 6 June 2012.
  37. ↑ "Former FDIC Chair to Lead Systemic Risk Council, Monitor Financial Regulation". The Systemic Risk Council. Retrieved 6 June 2012.
  38. ↑ "Jean-Claude Trichet to Join Systemic Risk Council as Senior Adviser". The Systemic Risk Council. Retrieved 16 May 2016.
  39. ↑ "Systemic Risk Council Policy Statement to G20 Leaders". The Systemic Risk Council. Retrieved 27 February 2017.
  40. ↑ "REIGNITING REFORMS TO ENSURE A RESILIENT AND STABLE FINANCIAL SYSTEM: A SECOND PHASE?" (PDF). The Systemic Risk Council. 2020. Retrieved 3 January 2022.
  41. ↑ "Comment on the Treasury Department's October 2017 Reports". The Systemic Risk Council. Retrieved 23 February 2018.
  42. ↑ "Comment on the Treasury Department's June 2017 Report". The Systemic Risk Council. Retrieved 19 September 2017.
  43. ↑ "CCP Resolution". The Systemic Risk Council. 2019. Retrieved 4 April 2019.
  44. ↑ "Comments regarding the eSLR and Volcker Rule" (PDF). The Systemic Risk Council. 2018. Retrieved 3 January 2022.
  45. ↑ "SRC Statement on Financial System Actions for Covid-19", Systemic Risk Council, 19 March 2020
  46. ↑ Paul Tucker (16 January 2014), "REGULATORY REFORM, STABILITY, and CENTRAL BANKING" (PDF), Hutchins Center on Fiscal and Monetary Policy at Brookings
  47. ↑ David Daokui Li and Paul Tucker (30 July 2014), 2014 TRIENNIAL SURVEILLANCE REVIEW—EXTERNAL STUDY—RISKS AND SPILLOVERS, International Monetary Fund
  48. ↑ Tucker, Paul (2014). "The Lender of Last Resort and Modern Central Banking: Principles and Reconstruction". BIS Papers. Bank for International Settlements (79).
  49. ↑ Jackson; Barr; Tahyar (2018). Financial Regulation: Law and Policy. Foundation Press. pp. 957–59.
  50. ↑ Tucker, Paul (2021). "Macroprudential policy as part of a broader financial stability regime: does it exist, what should it be?".
  51. ↑ "Council of management". National Institute of Economic and Social Research.
  52. ↑ Tucker, Paul (2021). "Select Committee on Economic Affairs:Quantitative Easing".
  53. ↑ "Research Fellows and Other Appointees". Mossavar-Rahmani Center for Business and Government. Retrieved 28 February 2018.
  54. ↑ "Sir Paul Tucker". Harvard Center for European Studies. Retrieved 28 February 2018.
  55. ↑ "Europe after Brexit: A proposal for a continental partnership". Bruegel.
  56. ↑ Patrick Donahue, Caroline Hyde and Arne Delfs (8 September 2016), Merkel Lawmaker Sees Leeway on Migration in Brexit Bargain Bloomberg News.
  57. ↑ "Unelected Power". Princeton University Press. Retrieved 28 February 2018.
  58. ↑ Felix Martin (13 June 2018). "Unelected power: banking's biggest dilemma". New Statesman America.
  59. ↑ "Global Discord". Princeton University Press. Retrieved 18 November 2022.
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