Richard Sharp

Richard Sharp   (banker)
Born	Richard Simon Sharp 8 February 1956
Alma mater	Christ Church (Oxford)
Religion	Jewish
Siblings	Victoria Sharp
Member of	International Rescue Committee/Directors and Overseers
BBC/Chair In office February 2021 - 27 June 2023 Employer British Broadcasting Corporation Succeeded by Elan Closs Stephens  Director In office 2005 - Present Employer International Rescue Committee Preceded by Jens Stoltenberg  Director In office 2005 - Present Employer Centre for Policy Studies Preceded by Jens Stoltenberg  Trustee & Chairman In office 2005 - 2012 Employer Royal Academy of Arts

Richard Sharp is a British former banker (six years with J P Morgan and 23 years with Goldman Sachs) who took over as Chairman of the BBC in February 2021.

On 28 April 2023, Richard Sharp announced his resignation as BBC/Chair in the wake of a report into his appointment, which found he had breached the government's code for the public appointments. He said he would stay on until a replacement is found.

Business activities

Richard Sharp is Founder & Managing Partner of DII Capital UK Adviser LLP, Chairman of Roundshield Partners LLP, Partner in SW7 Asset Management (UK) LLP and is Non-executive Director of biotech company Oncimmune.

Advisory roles

Richard Sharp was an advisor to Boris Johnson, when he was Mayor of London, is an External Member of the Bank of England's Financial Policy Committee from 2013 and advises Chancellor Rishi Sunak on the UK's economic response to COVID-19.

Unravelling the BOE mystery

Interviewed on a visit to Manchester in January 2015 about his role as external independent member of the Bank of England’s (BOE) Financial Policy Committee, Richard Sharp told the Manchester Evening News:

“I think it is important that we engage with the community as a whole, tell them what we are trying to do, be accountable for what we do. And also to explain a little bit of the structure of the Bank, and to explain all these acronyms like the FPC and MPC and so on.

“My visit to the city and speaking to the Pro-Manchester business group was really about unpicking that and explaining what we do and how that structure of the FPC emerged as a result of the financial crash.

“Why it is all centralised in the Bank of England, what we are accountable for, what’s on our mind and how we try and do what we do were also areas I covered.

“Central banks are kind of mysterious things. They’re full of people in suits using long words and talking in a very deliberate fashion.

“Maybe there is a need for their mystery. But at the same time, given the failings we’ve had, we need to engage with the community as a whole and say what we do and what we are accountable for. Particularly as we are not elected – we are appointed – and we have got a lot of power. So unpicking that and explaining that is important.

“The problem with very large banks is that, if they fail, and that failure ripples through the economy in a way that really damages everybody, then they could be viewed as ‘too big to fail’.

“And therefore, we need to ensure that not only can they fail, but when they fail there’s a process by which those who own or lend to the banks bear the cost.

Sharp is talking about the stress test, a process the Manchester-headquartered Co-op Bank failed last month, as expected.

“First of all, we want banks to have the capacity to make mistakes and own those mistakes. But what we don’t want is the taxpayer to have to pick up the tab.

“These investors should bear the cost of a bank failing, not the taxpayer.

“But the whole point is that they [banks] shouldn’t be ‘too big to fail’.

“The stress test is an interesting exercise. What we have, in effect said is, let’s not just make judgements about how much capital banks have, or ask are they being well run.

“But let’s also say, something unexpected happens, or a series of related events occur, where suddenly everything is a lot worse.

“For example, a year ago, no one predicted that oil would be $45-50. So unexpected things do happen.

“And therefore the BOE created a theoretical scenario whereby some bad things have happened – they’re unexpected, we’re not predicting they’re going to happen – and said to the banks, ‘tell us what would happen to your business under that event. Would you actually still be viable if that event happened?’.

“In order for you, for me, my mother, to keep our savings safe, you want to know that in the unlikely event of those bad things happening that the bank is not going to go under.

“We put the banks through a rigorous stress test. And we the FPC, given the results and the capital plans of the banks, were satisfied that no system-wide actions were needed.”

While Sharp isn’t able to discuss banks individually, he’s passionate about good governance, an area where the Co-op Bank has been judged to have failed badly.

“Governance is very important,” says Sharp. “You need to have the right information about what the risks are in any financial organisation.

“Secondly, you need to have people overseeing things who can really understand it and act in the interest of the entity, which sometimes is in conflict with the interest of the management.

“At the bank level, do the people who oversee the executives know what they are doing? Do they have the experience, the knowledge and the information to actually exercise their function properly?

“We (the FPC) do focus on governance. Sophisticated, objective, effective, transparent governance is very important.

“And that clearly was an issue at the Co-op and it is an issue for all banks to grapple with.”

Sharp, as he reveals, has spent all his adult life in the financial sector. His views are that it is an interesting topic, dynamic, global and information led. A property boom encouraged by a low rate environment might cause he and other FPC members to look at it as a potential source of instability. But what about mortgages and balancing lending amounts with getting young people on the property ladder?

“Let’s take a young couple, for example, and say they have a baby and a one bedroom place, but they want a two bedroom place. Their ability to borrow affects their lives and the comfort of their lives.

“We are having to make a judgement about risks to the system which come in two ways. First of all, if interest rates happen to be higher at some point, then the mortgages may be less affordable.

“And what we don’t want to have is a whole group who suddenly face difficulty because they thought interest rates were going to remain where they are, and it turns out they went up and they couldn’t afford them.

“The other risk is that if easy money is available across the system, and it all starts piling into property, then you might get an asset bubble.

“In the event of a shock, consumers might suddenly pull back on spending because they are worried about their debt. Then you could get a shock to the economic system.

“It’s all very well to say that we want to make sure the banks don’t engage with lending that could turn out to be risky – that means lending to people at a very high multiple of their incomes.

“But at the same time if we restrict it entirely, we might restrict the ability of some people to borrow who might, as it turned out, have been able to afford it.

“So we struck a very fine balance. We decided banks can continue to lend at a high multiple to income, but only on so much of their portfolio.

“That’s because we wanted to create flexibility where [lenders] recognise that people are going to have growing incomes and therefore can afford to borrow more.

Sharp is also impressed by the city of Manchester and the surrounding areas:

“If you take the north west region as a whole, it would be around the 15th largest country in Europe, somewhere between Finland and Greece.

“Manchester has cost competitive advantage. If you take the price per sq ft of real estate here it can be around £30 a sq ft. Whereas it can be £45-£60 a sq ft for the same office space in London.

“The city has great financial and professional services, great universities, great technology innovation culture – graphene, for example – and quality of life. I think you then need a community which is focused on the important issues.

“And Manchester exemplifies a real sense of community focus around the city.”

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