My choice for the Bank of England: Sir Terry Leahy

With the hapless Mervyn King stepping down as governor of the Bank of England next year, who should replace him? The best choice would be an experienced industrialist from outside the City, says Matthew Lynn. Someone like Sir Terry Leahy.

The Libor scandal will claim many victims before it runs its course. Bob Diamond's head has already rolled at Barclays. Other financial institutions must have been involved and as more names start to emerge there will be a lot more shame-faced resignations. Perhaps the greatest victim, however, will be the Bank of England and its increasingly hapless governor, Sir Mervyn King.

The charge sheet against King grows with each month that passes. The Bank did nothing to stop the credit bubble that built up during the middle of the last decade. There may been a few warnings about debt running out of control, but at no point did the Bank try and control it by raising interest rates, for example. After the financial crisis broke, it showed little appreciation of the scale of the crisis and moved slowly to start rescuing the banking sector. If it had moved earlier, perhaps fewer banks would have had to be bailed out by the taxpayer.

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Matthew Lynn

Matthew Lynn is a columnist for Bloomberg, and writes weekly commentary syndicated in papers such as the Daily Telegraph, Die Welt, the Sydney Morning Herald, the South China Morning Post and the Miami Herald. He is also an associate editor of Spectator Business, and a regular contributor to The Spectator. Before that, he worked for the business section of the Sunday Times for ten years. 

He has written books on finance and financial topics, including Bust: Greece, The Euro and The Sovereign Debt Crisis and The Long Depression: The Slump of 2008 to 2031. Matthew is also the author of the Death Force series of military thrillers and the founder of Lume Books, an independent publisher.