CITY AND SUBURBAN
Own goal at Lloyd's, and a hack on the referee's shins
CHRISTOPHER FILDES
owever touchy things may be in the City, someone will always come along with the means of making them worse. If all else fails, there is Lloyd's of London. In falling out with its chief executive, Ian Hay Davison, it has now contrived a spectacular own goal, and a smart hack on the shins for the Bank of England, for the regulators of the City, and for the ministers who have to Persuade Parliament to give those regula- tors the backing of law. Mr Davison has resigned on a point of principle He wants the chief executive to be answerable to Lloyd's governing body, the Council (not, that is, to the chairman of Lloyd's) for matters for which he is directly responsi- ble. Lloyd's three years ago was at its nadir. It had just secured its own Act of Parliament giving it wide powers and im- munities, in governing itself, and a crescen- do of scandals had made deafeningly clear that, as then organised, it was not fit to do so. Shocks spread through Whitehall and Westminster, and the cause of self- regulation was never so nearly lost than at that moment. The Governor of the Bank of England, Lord Richardson, then raised his authoritative eyebrows to their highest pitch. Asking the chairman of Lloyd's to call and see him, the Governor remarked that what Lloyd's needed was a chief executive of the highest calibre and corres- ponding authority, drawn from outside the market and untainted by it, whose pre- sence would in itself guarantee that the place would be cleaned up and stay cleaned up• The Governor had a short list — so short, indeed, as to begin and end with one name. Mr Davidson has now formally given the Council six months' notice. He can say that much of the work he came to do has been done. He has shaken up the administration, replaced most of the heads of department, secured major changes in the rules, and seen many of Lloyd's major offenders subjected to disciplinary pro- cedures — though, to his outspoken regret, none has been brought before the courts, It Is a pity that he should leave on a sour note, and more than a pity that the old guard should be so obviously relieved to see him go.
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