NatWest’s Sir Howard Davies: ‘I’m pessimistic. Brexit is a big mistake’ | Banking

smallir Howard Davies is a worried man. He worries about political polarization.He worries about the long-term effects Brexit in the City of London. He worries about resistance to globalization.

One thing he’s not particularly worried about is the health of the bank he presides over, country west, During the 2008 global financial crisis, it was on the brink of collapse in the name of RBS.

Davis, who has been chairman of NatWest for seven years, said the turning point in the bank’s fortunes was payments $4.9bn (£3.6bn) fine The role of US authorities in the subprime mortgage crisis in 2018. Until then, NatWest had been “hiding behind the couch” looking for funding, but now it is in better financial shape than many comparable European banks and has been able to expand. It was “a two-and-a-half game,” he said.

The football analogy is telling, because Davis has another concern. A lifelong Manchester City fan, he fears his side will be knocked out of the Premier League title by Liverpool in the final round on Sunday.To alleviate


age 71

family Married to a derelict journalist. Two sons, one left and one right.

educate Bowker Valley Primary School; Manchester Grammar School; Memorial University of Newfoundland; Merton College, Oxford University; Stanford Business School.

pay “The usual answer is ‘enough’ or ‘no comment’, but £750,000 was published in NatWest’s accounts.”

last vacation Ride along a section of the Rhine. “One day I will finish it.”

Best advice he got “Always show that you can do your boss’s job if needed.”

biggest professional mistake “Agreed to be a director of the LSE. Ended in tears.”

his overused word “Guardiola, like ‘We have Guardiola’, sings ‘Everything that’s happy’.”

how does he relax Play cricket, listen to pianist Brad Mehldau: ‘Not usually at the same time.’

Potential pain, he bet £100 on Liverpool’s 8-1 win, adding the title and the Champions League to the FA Cup and League Cup they’ve already won.

It’s an “emotional hedge”, he admits, speaking of his half-century career at the Foreign Office, Treasury and Bank of England as director-general of the UK’s top financial regulator, CBI, management consultant , head of the UK Airport Capacity Survey.

When asked which of his many favourite jobs he chose not to have any of the above, he opted instead for the Management Audit Committee (later scrapped by the David Cameron government) which looked into whether local authorities provided Value for money service.

“It’s been fascinating work. I’ve found that you can make major improvements to the local service and the changes are absolutely huge. It’s really fun and rewarding and you can actually see you’re making a difference. “

far less pleasant is Davis’ term as LSE dean ends It comes after concerns were raised over the school’s decision to accept funding from a foundation controlled by Muammar Gaddafi’s son.

Davis said he never asked for money himself, and he didn’t think the arrangement was right, but admitted he should have spotted the potential trouble. “I made a mistake, no doubt. I should have stopped it, but I didn’t.”

His latest project is a book – principalsPublished by Polity Press – On the Treasury’s role in the running of the economy under each prime minister Gordon Brown arrive Rishi Sunak.

Davies was named head of the Financial Services Authority by Brown in 1997 when regulation was separated from the newly independent Bank of England, after he failed to crack down on the City hard enough before the 2008 financial crisis. been criticized. “At the time, people were complaining that financial regulation was too strict, and I was serving as a judge and jury in my own court,” he said. “I have been accused of being an overly powerful regulator of obstructing ‘animal spirits’. There has never been any criticism in the other direction.”

Asked which of his most recent chancellors had the most time, Davis picked Alistair Darling, whose three years at the Treasury between 2007 and 2010 were largely dominated by the banking collapse.

“Alistair’s cards are terrible. He has no money, the financial crisis and his ex as his boss. Alistair doesn’t know anything that Gordon doesn’t. However, he’s completely composed.”

When he started writing the book, Davies was sure he would come to the conclusion that the Treasury should be divided into separate fiscal and economic departments, a model preferred by most other European countries. Since then, he has changed his mind. “It’s a really good idea to have some checks and balances in our system,” he said. “If we decentralize and have a Ministry of Economic Affairs and a Ministry of Budget, then their respective powers will not be as powerful as the Ministry of Finance combined, which will free the 10th. That would be a mistake.

“The prime minister hates the Treasury, partly because of its pro-EU views, or perceived pro-EU views, and its role in the referendum. But when he gets stuck, who else can save him but the Treasury come out?”

If Davies is optimistic about NatWest’s prospects, he is not so optimistic about Britain’s future prospects. “Actually I’m pessimistic. Brexit was a big mistake. You didn’t fix the problem be left behind By disrupting an area of ​​the country that has been writing checks. London is paying a lot of tax and will be hurt by Brexit over time.

“I worry about political polarization. The same thing is happening in France [Davies teaches in Paris] In the U.S. The situation here may not be as bad as in the US or France, but I sense a bitterness in public life that doesn’t create a good environment for rational problem-solving. “

Davies said when he first came to London from Manchester in the 1970s, the capital was “shady” and “monochromatic”, but has since transformed into a vibrant, multi-ethnic city. He worries that the pendulum may now swing in the other direction. “China is separating from America and has this war [in Ukraine]. London has been a beneficiary of globalisation and if it goes backwards maybe this global city has passed its peak. “

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