Mervyn King, former governor of the Bank of England, has quietly taken up a role as a senior adviser to Citigroup, surprising friends and former colleagues who assumed his disdain for bankers would stop him following peers through the “revolving door” connecting policymaking and finance.
Bankers inside Citigroup said Lord King began in the role around the time he stepped down from a shortlived stint on the board of his beloved Aston Villa football club, in April. A one-line entry appears on Lord King’s parliamentary register of interests.
Citigroup declined to comment. Lord King did not respond to a request for comment.
Lord King has repeatedly criticised banks and bankers in the wake of the financial crisis, both during his tenure as governor, up to 2013, and since. He has described bankers as “incompetent and greedy”. In 2009, he told a parliamentary committee that the “vast amounts of money beyond the dreams of ordinary people” paid to bankers had engendered a reckless culture in the City of London. A year earlier, he bemoaned as “unattractive” the fact that so many top graduates were drawn to the City rather than other more worthwhile careers.
Discovery of his appointment to Citigroup comes only weeks after it was announced that former EU Commission president José Manuel Barroso would become chairman of Goldman Sachs International — a move that French president François Hollande described as “morally unacceptable”.
Some City advisory roles are generously remunerated, the most famous example being former UK prime minister Tony Blair’s £2m-a-year contract with JPMorgan, though bankers say a more normal fee for 15-20 days of work a year typically done by senior advisers would be £250,000.
Unease over the seamless shift of senior policymakers into well paid roles in high finance has mounted, as the frequency of such appointments has intensified. The former Federal Reserve chairman Ben Bernanke recently took a senior advisory role at bond house Pimco, adding to an existing advisory position at hedge fund Citadel.
Bob Jenkins, a former member of the Bank of England’s Financial Policy Committee and now a senior fellow at the Better Markets lobby group, said there was a “real and perceived” risk of conflicts of interest.
That in turn would only confirm suspicions among the general public that a high-flying elite were feathering their own nests. “At a time when public trust in the establishment is so low, it behoves the body politic to be particularly sensitive to this issue,” Mr Jenkins said.
But financiers stoutly defend the practice as a sensible way to break down unhelpful barriers between policymaking and the fraternity of banking and asset management.
Stuart Popham, a former lawyer who is now vice-chairman of Citigroup, says: “People from these kinds of backgrounds bring political sensitivity, as well familiarity with a regulated environment and knowledge of the direction of travel of economic policy.”
Lord King has consistently kept a low profile since he left the Bank of England and deliberately sought no publicity of his role at Citigroup, according to people close to the situation. He has focused instead lecturing, writing and charity work, including co-founding the Chance to Shine cricket initiative for school children.
Additional reporting by Chris Giles
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