Clementi to be Bank's deputy

David Clementi, chief executive of Kleinwort Benson, the City investment bank, will be the new deputy Governor of the Bank of England. News of the appointment was let slip yesterday by Dresdner Bank, owner of Kleinwort, after the German bank announced its half-year results.

The Bank of England and Treasury could not confirm the appointment of Mr Clementi. Final details of the appointment, which will have to be formally approved by the Queen, remain to be worked out.

Mr Clementi would be in charge of the running of the Bank of England, acting as its chief executive, and would be responsible for financial stability. He will be seen as a welcome choice by Bank insiders. The job is expected to pay a salary in the region of pounds 100,000 a year.

The vacancy has been created by the departure of Howard Davies to run the new all-in-one City watchdog, which will take over most of the Bank of England's banking supervision wing. However, the Bank will still be in charge of the general stability of the UK financial system.

Under the reforms announced by Chancellor Gordon Brown, a second deputy governorship will be created with responsibility for monetary policy and the inflation target. The Bank's chief economist, Mervyn King, is thought to be a front-runner for this post, which will be created when the Bank of England bill is put before Parliament in October.

Mr Clementi, 48, was an architect of the Conservative privatisation programme and worked on the flotation of British Telecom, British Gas, Cable & Wireless and the electricity industry. He has worked at Kleinwort Benson since 1975.

Dresdner's war chest, page 17