A high-flying executive who became one of the most prominent female bosses in the banking crisis has been tipped to become the new head of the London Stock Exchange.
British-born Blythe Masters, 48, a former finance chief at Wall Street bank JP Morgan, has been identified as a possible candidate amid an unseemly row that has led to the sudden departure of Xavier Rolet after eight years as chief executive.
He dramatically left last week following an intervention from the Governor of the Bank of England, Mark Carney.
New role?: Blythe Masters could take over at the London Stock Exchange
It had been announced in October that Rolet would be departing, but possibly not until the end of 2018.
On Tuesday, Carney stepped in, calling for ‘clarity as soon as possible’ over the struggle for control of the exchange between Rolet, backed by a major shareholder, and LSE chairman Donald Brydon.
Now numerous market sources contacted by The Mail on Sunday have identified Masters as a possible replacement for Rolet.
They say her deep understanding of financial markets would make her the perfect candidate to run the exchange.
Masters is currently chief executive of financial technology business Digital Asset, having stepped down from her 27-year JP Morgan career in 2014.
The Cambridge economics graduate had a brush with controversy over her role at JP Morgan in helping to create ‘complex credit derivatives’ that were central to the 2008 meltdown.
US investor Warren Buffett once described derivatives as ‘financial weapons of mass destruction’.
Ousted: Xavier Rolet had the backing of Sir Christopher Hohn (left)
She retorted that it was the misuse rather than design of instruments such as credit default swaps – which proliferated on an industrial scale – that caused problems, ‘much as poor workmen tend to blame their tools’.
Others linked to the role include Tory Euro-MP Kay Swinburne, a former banker, and Tim Howell, a former chief executive of Euroclear, a firm that settles payments.
The timing of the Rolet row could hardly be worse for the LSE and the City of London, which is seen as one of the most vulnerable sectors from Brexit.
Rolet was pro-Remain in the lead-up to last year’s EU referendum. Since the vote, the 58-year-old Frenchman has fought vocally to protect London’s dominance of the ‘euro clearing’ market.
He has also been central to a controversial, Government-endorsed effort to encourage oil giant Saudi Aramco to list its shares in London.
Mark Field, Conservative MP for the City of London, has urged the LSE to find a resolution as soon as possible.
He told The Mail on Sunday: ‘Whilst I understand the reasons for his moving sooner rather than later – given this big, very public row among senior people within the London Stock Exchange – I think it’s regrettable that he isn’t at the helm to see us through the Brexit negotiations.’
The LSE has appointed headhunters from Egon Zehnder to find a replacement.
To complicate matters for the LSE, Brydon is facing a vote called by a Rolet supporter to unseat him from the chairmanship.
The challenge has come from billionaire hedge fund manager Sir Christopher Hohn, whose investment firm, The Children’s Investment Fund (TCI), owns 5 per cent of LSE shares. After the LSE announced that Rolet would be stepping down before the end of 2018, TCI suggested that Brydon had in fact forced Rolet to quit as chief executive. It demanded his reinstatement.
In an effort to appease shareholders upset by the handling of Rolet’s exit, Brydon, 72, said last week he would leave in 2019. But Hohn remains unhappy and has opted to push ahead with the vote.
The LSE has been forced to call a meeting of shareholders on December 19 to vote on the proposal to remove Brydon, who has been chairman of the board since 2015.
Hohn, 51, is understood to be confident he has enough investor backing to oust Brydon.
Crisis: The LSE has been forced to call a meeting of shareholders on December 19 to vote on the proposal to remove chairman Donald Brydon
TCI, which is considering putting forward its own candidates for the chairmanship, will put pressure on Brydon at the LSE’s annual general meeting next year if it is unsuccessful in removing him this month.
A source said that Brydon’s handling of the Rolet saga meant he was already a ‘lame duck chairman’. The source added that it was an embarrassment for the LSE that the Bank of England’s Carney, rather than Brydon himself, had effectively sacked Rolet. Roger Barker, head of corporate governance at the Institute of Directors, suggested Brydon and the LSE board have ‘fumbled’ and ‘not covered themselves in glory’.
However the Financial Conduct Authority has backed Brydon to remain until 2019, as did one top 20 shareholder spoken to by the Mail On Sunday.
A source close to the LSE board suggested Rolet, unhappy with his departure, seems to have endorsed TCI’s actions.
Rolet is understood to deny collusion with Hohn and, after signing a confidentiality agreement, has not commented other than to describe recent publicity as ‘unwelcome’.
David Warren, the LSE finance boss who was made interim chief executive last week, is another leading contender to succeed Rolet.
Other in-house contenders are chief operating officer Chris Corrado and information services boss Mark Makepeace.