Gordon RichardsonMr. Governor, Robin Leigh-PembertonMr. Governor Elect, former [Harold Wilson and James Callaghan] Prime Ministers, former [Anthony Barber and Denis Healey] Chancellors of the Exchequer, Ladies and Gentlemen.
I am very pleased to welcome you here tonight to honour Lord Richardson, who retires later this week as Governor of the Bank of England after holding that position for longer than any Governor since the Bank was founded in 1694 other than Montague Norman and Lord Cobbold.
The invitations to you to attend this evening's dinner were sent out to you at the beginning of May before I had decided to seek a General Election. So you will understand that I am particularly [end p1] glad to be able to welcome you this evening.
I know that Lord Richardson would want me to extend a special welcome to the former Prime Ministers and former Chancellors of the Exchequer with whom he has worked so closely during the ten years for which he has been Governor. Also to the Chairman of the Federal Reserve Board, Mr. Volcker the Chairman of the Bank of International Settlement Fritz Levtweiler and the Managing Director and Chairman of the Board of the I.M.F. M. Jacques de Larosière—all old friends. [end p2] We are grateful for the compliment they and their wives have paid to Gordon Richardson and to us by travelling so far to be with us tonight.
The ten years of Governor Richardson 's term have been testing and critical ones for the financial community, in Britain and internationally. He took office just after the world's inflation had finally put too much strain on the remaining lynch-pins of Bretton Woods. The fixed dollar standard, that rock of post-war monetary stability, had collapsed, perhaps never to return. In future we had to rely not on gold but on ourselves. [end p3]
Those in this room will have their own memories of the events of the succeeding years: —We think of the secondary banking crisis in the early 1970s when the wise and quiet diplomacy of the Governor, supported by the trust and co-operation built up between the Bank and the City over many years, contained and prevented the incalculable damage which could have been caused to the City and to many sound companies. —We think of the oil price increases of the middle and late 1970s, and the strains which the massive petro-dollar surpluses imposed on the world banking system, followed more recently by even greater strains for some countries and [end p4] some banks as those surpluses have turned into deficits. In these times of peril for the whole financial system of the world, when the debt of Latin America and Eastern Europe threatened the financial system, the Governor and his fellow central banks lent their authority and trust to maintaining the liquidity of the banks and finance houses of the free world. As Chairman of the Group of Ten, Gordon Richardson has played a crucial part in avoiding financial disaster. [end p5] —We think of the IMF negotiations of 1976. And the introduction of new techniques of funding and monetary control: And of the part which that has played in the restoration of soundness in the British currency. It must give as much pleasure to Lord Richardson as it does to me that at the moment of his retirement inflation in Britain is at its lowest for [end p6] 15 years, an achievement to which the Governor of the Bank of England has made a considerable contribution.
And amid all these tumults there have been many other developments in banking and in the [end p7] role of the Bank of England itself which Lord Richardson has led and guided so wisely— the improvement of the City's traditional system of self-regulation: the Bank of England's wider responsibilities for banking supervision under the new Banking Act: the Governor's skilful and eloquent advocacy for the City, to which Sir Harold Wilson as Chairman of the Wilson Committee can bear witness: the ending of exchange controls which some said would never happen—but did. [end p8] the re-opening of the fixed interest capital market to industry as inflation falls: adapting and streamlining of the Bank's organisation, and strengthening of its expertise in many areas. There can be no doubt that Lord Richardson bequeaths to his successor a first-class organisation and a first-class team which has risen to the challenge of our times. [end p9]
Let anyone who says that banking is a cautious, slow-moving profession study the list of developments and reforms which have taken place under Governor Richardson 's leadership—all guided by the wisdom and discretion which preserves the prudence and reliability of past traditions while adapting to the present and the future.
I can imagine that in these days many in the City are paying their tribute to Lord Richardson 's achievement with their customary hospitality. Nevertheless he shows no sign of wilting. Tonight we pay particular tribute to his work with the Government. [end p10]
I am told that the relationship between the Bank and Westminster has not always been easy. Lord Cunliffe, Governor of the Bank between 1913 and 1917, refused ever to meet the Chancellor of the Exchequer without the Prime Minister present to protect him. I have not noticed any sign of such a request in recent years. Nor, I hasten to say, of the Governor refusing to meet the Prime Minister without the Chancellor of the Exchequer present to protect him. [end p11]
And we know that Montague Norman [sic: Montagu] had his moments with Winston Churchill. When Winston as Chancellor tried to stop the Bank from raising the Bank Rate, Montague Norman rebuffed him with the remark that “All Chancellors want cheap money”. Some called it the second Norman Conquest. Nowadays we have better co-operation.
All of us from this end of town who have worked with Gordon Richardson will agree that he has been a wise counsellor and a true friend. We have all rejoiced that the end of his period of Governorship has been marked not only by his elevation to the House of Lords, but by Her Majesty's [end p12] conferring on him the signal honour of creating him a Knight of the Garter.
Those who saw him in the Garter procession two weeks ago will testify what distinction he added even to that dignified occasion.
Gordon, in welcoming and offering our best wishes to Robin Leigh-Pemberton as your successor, we all thank and congratulate you for your most distinguished service as Governor of the Bank of England; and we offer you and Lady Richardson our affectionate good wishes for a happy but less hectic time in the period ahead.
[Toast to Lord and Lady Richardson]