Sir Kit McMahon

(Elected 2003)

Biography

Sir Kit McMahon, former Deputy Governor of the Bank of England and Chairman of Midland Bank (now HSBC Bank) is delighted to have been made a Fellow of Birkbeck.

‘I consider it a great honour,’ he says.

A Governor of Birkbeck for the past 12 years, Sir Kit was Chairman of the Audit Committee between 1996 and 2003. As an example of the role the Audit Committee can play, he cites the £18m Malet Street building project. ‘With such an operation it is useful to have a number of people to act as watch-dogs, to ensure that the College gets value for money,’ he says.

Sir Kit (76) was born in Australia, where he studied history and English (1947–1949) at the University of Melbourne, later teaching English literature there. Settling in England in 1951, he studied philosophy, politics and economics at Magdalen College, Oxford and then joined HM Treasury as an Economic Adviser. He spent seven years with the Treasury, with the last three seconded to the British Embassy in Washington DC. He returned to Oxford in 1960 to teach economics at Magdalen, where he was made an Honorary Fellow in 1986. The attractions of public service proved too strong and in 1964 he joined the Bank of England, where he spent the next 21 years – as Economic Adviser, Executive Director and finally Deputy Governor (1980–1985).

In 1986 he moved to Midland Bank where he was Chairman and Chief Executive until his retirement in 1991. He has now relinquished most of his non-executive directorships, though he remains on the boards of Angela Flowers Art Gallery and Bamber Gascoigne’s History World Ltd.

In the future he aims to spend more time in his Gloucestershire garden and delve into his family history, saying: ‘I expect I’ll be spending an increasing number of my waking hours crouched over my lap-top.’

Oration

Master, President, Distinguished Governors, Graduates and Guests.

Sir Kit McMahon's life is characterised, not only by its very great achievement and distinction, but also by its enormous variety. He is not only antipodean but amphibian, moving with ease from pole to pole, from culture to culture and from element to element.

Born Christopher William McMahon in Melbourne Australia, he was educated at Melbourne Grammar School, established in 1858, ten years after the foundation of Melbourne itself, and the producer of artists, Antarctic explorers and no fewer than three prime ministers. From there he proceeded to the University of Melbourne to read History and English, graduating in 1949. For a short period, he was employed as a tutor in English literature in the university, before proceeding to Magdalen College Oxford, to read Philosophy, Politics and Economics, from where he graduated with high distinction in 1953. It was time to move, for a while at least, out of academic life. Sir Kit became economic assistant to the Treasury and then, for three years from 1957 to 1960, economic advisor to the British Embassy in Washington. But academic life still had its attractions, and he found himself back at Magdalen as Fellow and Tutor in Economics from 1960 to 1964. In 1964 his book Sterling in the Sixties appeared, with another book, Techniques of Economic Forecasting appearing in the following year.

It was at this point, in his late 30s, that Sir Kit joined the Bank of England, an institution that he was to serve for nearly a quarter of a century; first as a junior advisor, then as executive director and then, from 1980 to 1985, deputy governor. This last role, combined with the clarity of his analysis and the pungency of his language, meant that he was often in the limelight, and called upon to deliver up analysis and prediction. People expect a great deal more of economists in the way of soothsaying than they are sometimes themselves inclined to deliver. Like many another economist, Sir Kit appears to be intensely aware of the fragility of our command of the future. Asked in 1988 to speculate about monetary conditions 25 years in the future, he wrote: I imagine my expectations will be similar to those of many people and thus may not be controversial.' And then added drily 'Unfortunately, [this] does not make it more likely that [they] are correct.' On the other hand, a Microsoft software firm has seen good reason to quote his maxim that 'No time is as usefully spent as that spent guarding against disasters that do not in the event occur'. Would that Microsoft were indeed guided by this principle.

One of the more dramatic of his public roles, early in his deputy governorship, was in representing the Bank of England in the protracted international negotiations which eventually led to the release of the 52 hostages held captive for fifteen months in Teheran on 21st January 1981. He was among those who saw the hostages stepping from their plane in Wiesbaden. He has always been capable of surprising his audiences, perhaps never more so than when in the course of a TV programme in 1995, he breezily described banking as 'a confidence trick', a statement which, if one thinks about it, cannot be anything but the literal truth. Sir Kit has never been afraid to take a contrary line and so I suspect that he was not unduly troubled by Nigel Lawson's characterisation of him in his memoirs as 'an unreconstructed neo-Keynesian who made no secret of his opposition to the politics of the government'.

In 1987, he moved to the Midland Bank to become their chairman, a position he held for four years. From this period onwards, he became energetically involved on the boards of many consulting agencies and think-tanks. From 1992 to 1996, he was chairman of Coutts Consulting Group, who provide training and consultancy and career advice in banking. He was involved at the inception of the Centre for the Study of Financial Innovation, which is an independent think tank based in London, formed in early 1993 to stimulate research into the future of the financial services industry, and to provide a neutral meeting ground for financial professionals and academics to exchange ideas about financial regulation, the management of risk and the growth of international markets. He is also a member of the Group of Thirty, which is a private, non-profit, international body composed of economic experts and senior financial professionals from both the private and public sectors. It aims to deepen understanding of international economic issues, to explore the repercussions of economic decisions and to generate policy options. From 1989 to 1992, he was on the board of Young Enterprise, a charitable collaboration between business and volunteers, which provides business and enterprise education programmes for more than 150,000 young people each year. He served on the advisory committee of the Houblon-Norman Fund Advisory Committee, which awards fellowships designed "to promote research into and disseminate knowledge and understanding of the working, interaction and function of financial business institutions in Great Britain and elsewhere and the economic conditions affecting them".

He has been in receipt of many more awards and distinctions than I can comfortably enumerate; I will content myself with mentioning just two. In 1988, the University College of North ales anticipated us in making him an Honorary Fellow and, in 1990, he was awarded the order of Chevalier of the Légion d'Honneur, France's highest national distinction, which is awarded for conspicuous service in public life.

You have heard that Sir Kit began his career as a student of the arts, and he has maintained and developed his interests in this area, driven by a long and strongly-held conviction that corporate culture should make contributions to the life of the community. He has been active on the board of the Royal Opera House, a trustee of the Whitechapel Gallery and a non-executive director of the Angela Flowers Gallery, which was established in 1970 to exhibit and promote the work of British artists and both prefigured and established the conditions for the Young British Artists movement. He can be a formidable ally to have in your corner. As chairman of the Arc Dance Company, he led a fight during 2000 to secure its survival, after the Arts Council had turned down its application for continued funding. Sir Kit spearheaded the campaign to gather support from artistic directors of major dance companies and dance critics, a campaign which eventually led to the award of funds from the lottery fund. In October 1997, he joined a group of celebrities, including Martin Amis, Lynne Franks, Alan Yentob, Harold Pinter and Alan Hollinghurst, in supporting the Independent on Sunday's campaign for the decriminalisation of cannabis. I am not sure whether this is a reflection of his instinct for economics, his feeling for the arts, or perhaps just his keen interest in gardening.

Sir Kit first joined Birkbeck as a Governor in 1991, and has given us steady and unbroken service until his retirement this year, with his most valuable role perhaps being as Chair of the Audit Committee. The Audit Committee does not usually make headlines - it's a sure sign that something is wrong if it does - but it performs a vital role in overseeing the financial management and processes of the college. Perhaps we have never needed his wisdom and financial acuity more than during the recent £18 million spending spree on Birkbeck's new Torrington Square development, now almost complete. That is a lot of money to keep track of, and we have been very grateful to have had Sir Kit's watchful eye monitoring proceedings.

Sir Kit's has been a life of achievement and breadth of engagement We honour his many distinctions today and thank him in particular for his long and assiduous service to us as Governor. It gives me the very greatest pleasure to welcome him now as Fellow of Birkbeck College.