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Awkward appearances.

In the 78-year history of the Bank for International Settlements, the tenure of General Manager Malcolm Knight was--to put it mildly--not under a lucky star.

There was unease upon his arrival at the "central banker's bank" in the spring of 2003. And there is even deeper unease upon his departing under a host of questions that have dogged his exit from the institution.

When on June 20, 2008, it was announced that Knight would leave his position at the end of September to join Deutsche Bank AG as vice chair man to oversee relations with regulators and central bankers beginning October 6, this might have been good news for Germany's leading bank.

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But starting work for Deutsche Bank only a few days after leaving BIS was seen by the BIS staff and by most central bank governors as a good governance disaster for an institution that is acting as a global standard setter.

In what was called a "good governance revolt," key governors acted at the BIS general annual meeting at the end of June and asked Malcolm Knight to clear his desk immediately. Before opening his last press conference as General Manager, Knight announced his immediate departure. "In order to prevent any potential or perceived conflict of interest, both I and the board thought it would be in the best interest of the institution for me to be no longer actively involved in the management of the BIS, so I will be on leave with effect from tomorrow."

When Knight, the former senior deputy governor of the Bank of Canada, was selected to head the BIS in 2003, TIE ran a piece ("Big Unease at the Tower of Basel," Spring 2003) reporting that some finance ministries, supervisors, and even central bankers objected to this move. There were concerns that Knight, a midlevel staff member of the International Monetary Fund for most of his professional career, could be used as an "Anglo-Saxon Trojan horse" in the BIS, once a European fortress of central bank power.
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Title Annotation:Off the News; Malcolm Knight resigns from Bank for International Settlements and joins Deutsche Bank AG as vice chairman
Author:Engelen, Klaus C.
Publication:The International Economy
Article Type:Brief article
Date:Jun 22, 2008
Words:337
Previous Article:No picnic at the Bank of England.
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