Examination of Witness (Questions 20 -
WEDNESDAY 25 SEPTEMBER 2002
20. If you are privy, as you say, to the interest
rate movements coming up and you have some financial control over
your holdings, do you not think that you could be open to the
chargethe perception, perhaps, but not the realitythat
you are in a very privileged position? (Sir Andrew Large)
Clearly that is what I have got to be most careful about, Chairman.
21. When you say "most careful about",
I think what we as a Committee would want to find out is that
there is no connection between control of your financial holdings
and your position as Deputy Governor. (Sir Andrew Large)
22. Otherwise, even being most careful, that
would seem to be unsatisfactory. (Sir Andrew Large)
23. Can you elaborate on that for us? (Sir
Andrew Large) Clearly, I need to satisfy you on it. I need
to satisfy you from my own point of view as well as the Bank's,
and I will do that. I will do that to the best of my ability.
24. How do you envisage satisfying us? (Sir
Andrew Large) I think what you would probably like to know
is the arrangements that are put in place.
25. You will keep us informed? (Sir Andrew
Large) I will.
26. Okay. Has the Government or the Governor
of the Bank suggested that an independent evaluator study your
financial affairs to ensure that they will not pose a conflict
of interest or be seen as posing a conflict of interest? (Sir
Andrew Large) He has not put that point to me but I think
the answer to the question is no.
27. Do you think it would be a good idea, maybe,
to go back and discuss it with the Governor? (Sir Andrew
Large) Yes, and perhaps this can go with the earlier question
you asked me, to which I have just answered.
28. If the Governor is involved there, fine.
You have been Deputy Chairman and a Director of Barclays Bank
since 1998. Do you see any difficulties in operating as the Bank
of England's Deputy Governor responsible for financial stability
given that until very recently you were a senior director at Barclays? (Sir
Andrew Large) No.
29. None at all? (Sir Andrew Large)
30. Do you have any outstanding financial or
other interests at Barclays or any of the other companies for
which you have worked? (Sir Andrew Large) I have some
shares in Barclays which I accumulated when I was there.
31. Some would maybe think that could be a difficulty,
with shares in Barclays, if you are, simultaneously, holding the
position of Deputy Governor of the Bank. (Sir Andrew Large)
I think that, Chairman, really goes back to the earlier part of
your discussion, because if that were to be the feeling then the
question comes: at what juncture should they be disposed of and
how? I think that would need to fall into the arrangements that
I need to satisfy you on.
32. Last question, Sir Andrew, you will be committed
to full transparency in this respect with this Committee? (Sir
Andrew Large) Totally.
Chairman: Thank you.
33. Sir Andrew, in the questionnaire that we
submitted to you (which you kindly filled in and sent back) we
asked you, at question 6,
how your performance in the job should be assessed after a five-year
period. I was a bit surprised by your answer because it basically
says "Well, look at my voting record and I hope to have offered
some analysis or points of view". As Deputy Governor of the
Bank with responsibility for financial stability, is that the
limit of what we should expect from you over five yearssome
points of view and your voting record?
(Sir Andrew Large) I took the question
to be referring to the MPC and, therefore, I responded on that
basis, but maybe I misunderstood it. My response was, if you like,
addressing the question of how might my performance at the MPC
be judged, and that was why I responded in the way I did.
34. Let us give you the opportunity to expand
a bit on it then. How would you define "financial stability"?
(Sir Andrew Large) "Financial stability"
has a number of elements. One is, obviously, confidence in the
financial environment, the banking system and other areas of the
financial system. The other is the infrastructure, if you like,
within which the financial institutions operate, which includes
such areas as clearing and settlement and other areas in which
if people are to deal they have to have confidence that it will
work. So I think those are, really, the twotrying to boil
it down into the simplest analysismajor components, if
35. Have you any concerns at the moment about
either of them in the United Kingdom? Are there any worries you
have got about confidence or about the infrastructure?
(Sir Andrew Large) There are no particular
areas at the moment. You need to bear in mind that I am coming
to this afresh and, therefore, there is information that I am
not fully aware of, perhaps, at the moment. However, if you look
at the world economy there are all kinds of issues which are capable
of impacting the United Kingdom in one way or another. We obviously
have to be mindful of what they all are, but I do not see, at
the moment, any particular area where the public needs to feel
that confidence should, in any sense, be called into question.<dc0><nb
36. So you think you are inheriting an area
of responsibility where the status quo, at the moment, is fine?
It is okay as far as you can see?
(Sir Andrew Large) I hesitate to say
immediately "yes" to that question because you could
sound rather arrogant or complacent, if you like, and I do not
want to give you that impression. Of course, there are all kinds
of areas that one has to look at all the time that could impinge
on financial stability: the Stock Market situation, for example;
the situation in Japan, and so <dc0><nbon and so forth.
There are all kinds of areas which have to be kept under very,
very close scrutiny.
37. Do you have in mind anything you can do
over the next five years in your post which will improve and enhance
financial stability in the United Kingdom? Any plans or ambitions?
(Sir Andrew Large) The United Kingdom
is part of the world community and things that happen in the world
community are going to affect the United Kingdom. One area of
work I have been very much involved with and which I want to carry
through is to ensure that in the international arena the clearing
and settlement arrangements are put together in ways that are
much more efficient than they are today and which are systemically
more robust than they are today. So that is one area, for example.
38. You can see some deficiencies in the system
and you will want to fix them?
(Sir Andrew Large) Yes. You asked me
about whether there was particular confidence, and that was what
I was answering, but of course there are all kinds of areasdifficult
areas of public policy, very interesting things that need to be
done. Another area which is often talked about is the whole question
of accounting standards and the international accounting standard
arena. Clearly that is a field that is of great importance, of
great interest and in whatever way I or we might be able to make
some modest contribution to that discussion I think we would try
to do so.
39. Have you read our modest contribution to
(Sir Andrew Large) Which precise contribution?
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