A small sigh of relief from London today. Bank of England governor Mervyn King is to be the vice-chair of the newly launched European Systemic Risk Board, established yesterday and whose inaugural meeting takes place January 20, 2011. Relief, because the appointment suggests eurozone concerns won’t dominate the Board, and that the UK’s banking-driven economy will be represented.

Relief, however, will be limited in some quarters. There is a relative lack of bankers and technical experts, who really understand the tricks of the banking trade. Even if there are ex-bankers among the various levels of hierachy and sub-committees, it is not the same as plugging the institution directly into the banking sector. This is not an oversight but part of the Act: “No member of the General Board (whether voting or on-voting) shall have a function in the financial industry.”

There are two Advisory Committees because “the composition of the ESRB will be very high level …[and] it can happen that the ESRB needs to draw on more specific competences than the ones usually available at the ECB.” The Technical committee comprises representatives nominated by central bankers and regulators – there will be about 60 of them. The Scientific committee, which should have 15 independent experts – though suggested categories are academics, trade unions and small businesses. Read more