John McFarlane was on almost nobody's list as a contender to be the next chairman of Barclays. This was for two reasons.
First, he is not even two years into the job of chairing big insurer Aviva and only took the same post at transport operator FirstGroup in January this year. Second, McFarlane himself told the Evening Standard last year that "there is no way on Earth I could conceive of chairing a bank".
Such statements should never be taken too seriously. Thinking changes when there's a top post up for grabs. A few shareholders in Aviva and FirstGroup may grumble about McFarlane's short stints, but they cannot be surprised. He is a banker at heart.
Regulators will be pleased. After the disasters at Royal Bank of Scotland (Sir Tom McKillop), HBOS (Lord Stevenson) and Northern Rock (Matt Ridley), rule number one these days is that bank chairmen must know about banking. McFarlane has had a long career at ANZ, Standard Chartered and Citigroup's predecessors. At RBS, he arrived as a non-executive just before the final meltdown in 2008, too late to lose brownie points. He is clearly a credible appointment.
At Aviva, McFarlane has earned a reputation as an all-action chairman. He helped to dispatch Andrew Moss, the unloved chief executive, and took the reins himself until he could find a suitable successor. His instant assessment of Moss's handiwork was impressively withering: Aviva had taken £1.3bn of restructuring charges over half a decade but was still perceived as bureaucratic and inefficient. Aviva's share price started to improve almost from that moment of honest speaking.
At Barclays, it's obvious that similar management fireworks are not planned. Just in case chief executive Antony Jenkins felt nervous, McFarlane stated that he supports the strategy and the boss. Fair enough. Jenkins's second crack at a strategic overhaul, involving deeper cuts in the capital-hungry and perennially disappointing investment bank, is definitely better than his first. The job now is to stick to the script.
McFarlane's blunt style – let's hope – will come in handy. Last year's bonus round at Barclays was a farce as the pool of payments was inflated in the face of slumping profits to prevent what Jenkins called a "death spiral" of staff defections. That cannot happen again. McFarlane's first task is to remind the alleged superstar employees that it's really not their bank and that shareholders deserve a fairer cut.
Put a couple of hundred Aldis in an independent Scotland and watch supermarket prices fall, says Tim Martin of JD Wetherspoon. He has a point. In the grand scheme of referendum worries, higher prices in shops are not at the top of the list. Retailing is dynamic – just ask formerly all-conquering Tesco.
The bigger economic worry – and it's huge – is the currency. As everybody knows by now, a currency union requires a political union to work successfully. Mark Carney, governor of the Bank of England, has been saying so in increasingly stark terms.
Alex Salmond's view is that, when push comes to shove and debts and assets are divided, Westminster would still agree a formal currency union.
No, it wouldn't – or at least not on favourable terms to Scotland. Voters in the rest of the UK would not tolerate a mock-up on home soil of the eurozone's dysfunctional arrangements. Markets would react viciously if Westminster caved in.
In that case, an independent Scotland's only realistic choice is sterlingisation, or using the pound informally, which might mutate into a Hong Kong-style arrangement whereby a new currency board maintains a peg with sterling. Denmark, which links to the euro, is another example.
Again, Carney's comments – despite being guarded at the Treasury select committee this week – point to the size of the financial challenges. Committee chairman Andrew Tyrie crunched the numbers provided by the Bank and produced this result: an independent Scotland would need £34bn of reserves to match Denmark's ratio of reserves to GDP; to match Hong Kong, the figure would be £155bn.
Tyrie added: "The governor noted that £15bn would be at the 'upper end of the range' that Scotland might reasonably inherit as reserves. Scotland would need a multiple of that. The comparisons with Denmark and Hong Kong in the governor's note say it all. Meeting the shortfall in reserves means that Scotland would, as the governor also pointed out, face 'real fiscal costs'."
In the long run, it might be argued, the Scottish economy, with current GDP of about £145bn, could emerge as strong as Denmark's or Hong Kong's. But the process of getting there could be brutal. Forget the relative price of a B&Q kitchen in Newcastle and Glasgow – the economic challenges are a lot deeper.
It seems an age ago that Alistair Darling was prodding Salmond with the line "what's your plan B?" if there is no formal currency union. It is still the right question, and still unanswered.
Amazon, the US online retailer, this week announced it will say goodbye to Slough as its UK base and move to a 15-storey building by Liverpool Street station in London that can accommodate 5,000 employees plus a basketball court and swimming pool. What will all these Amazonians do when they're not shooting hoops and wearing goggles?
Please do not suggest that they will be transacting with UK customers. No, no, that job will continue to be done by Amazon EU Sarl over in Luxembourg. The UK end merely provides "services" to the pan-European company in the Grand Duchy, like running the UK warehouses, designing software and procuring products.
It's a highly tax-efficient structure and, of course, perfectly legal. But if the OECD wonks, due to report soon on how to update digital tax rules, require illustration of the need for reform, this is it. If a company has multiple warehouses in the UK, and a 600,000 sq ft building in central London, it's hard to maintain the idea that these amount, in the tax jargon, to an ancillary activity.
The "other" bank chairman appointed yesterday was Glen Moreno, the chairman of Pearson, who is joining Virgin Money, presumably to lead a stock market flotation. Not so long ago, Moreno was being whispered as a possible chairman of Lloyds Banking Group, where he was senior independent director. In the event, Lord Blackwell got the Lloyds gig.
If the rush of appointments and names creates the impression that plausible bank chairmen are in abundant supply, RBS would wish that were so. Everybody knows Sir Philip Hampton will be departing next year to join GlaxoSmithKline but RBS hasn't actually said so. This, one assumes, is because the bank hasn't nailed a successor. Moreno could have been a contender but is now taken.
The timing of the Scottish referendum won't have helped RBS' search – but surely there's somebody who wants to chair an 81%-state-owned bank that may become more of political football than ever. Isn't there?
guardian.co.uk © Guardian News and Media Limited 2010