Lord O'Donnell: Bank favourite who wants to leave advising behind But he's not a dead cert. Despite his superhuman reputation, Lord O'Donnell's biggest weakness is in fact his obvious fallibility. He failed to spot the financial crisis. Almost uniquely, Lord O'Donnell was at the centre of centre throughout the years of boom and bust. He was permanent secretary to the Treasury from 2002 and then Cabinet Secretary from 2005, throughout the crisis and its aftermath. So if he's already failed once, can Britain trust him to prevent or even see the next crisis? Lord O'Donnell's proponents argue that his advantages will still outweigh the human flaw: his career in Whitehall has spanned three prime ministers but he also has international experience, including with the International Monetary Fund (IMF), the World Bank and with Brussels' policy. Augustine O'Donnell is a proud South Londoner; his official full title is Baron O'Donnell, of Clapham in the London Borough of Wandsworth. He was educated at Salesian College, a Roman Catholic college in Battersea, and chose economics early on. He read economics at Warwick University before taking a post as lecturer at Glasgow. In 1979 he joined the Treasury as economist, embarking on a career that would take in stints at the British Embassy in Washington; Press Secretary at No 10, first to Margaret Thatcher and then John Major; and later the UK's director to both the IMF and World Bank. His time in the Civil Service also saw him standing beside a junior treasury adviser, David Cameron, as Norman Lamont declared that Britain had suspended its membership of the European Rate Mechanism at 7.40pm on September 16 1992 - a date better known as "Black" Wednesday. He became permanent Secretary to the Treasury in 2002 and three years later Cabinet Secretary. In May this year, the London School of Economics asked Lord O'Donnell to speak about his experiences in a lecture dubbed the "10 Commandments of Good Policy Making." He chose instead to label his thoughts as "triumphs and disasters" of the decisions he was part of. Triumphs included Britain's decision not to join the euro and establishing the independent monetary policy committee to set interest rates. Disasters he named were the poll tax and not spotting the financial crisis. Expanding on the crisis, he issued a frank mea culpa. It is clear the regulatory system created incentives for excessive risk-taking in part because it was believed that the Government would bail out the banks if the crisis was large enough. I take my share of the blame for this episode; I thought the banks knew what they were doing. That was wrong. He also revealed a hands-on approach to rebuilding the system. We need to revise the regulatory system, ideally in a globally co-ordinated way; we need to have ways of handling banks deemed 'too big to fail'. There is a lot to be learnt from countries like Canada that weathered the storm remarkably well. George Osborne is another Canada admirer - so much so that Mark Carney, the governor of Canada's central bank, has been linked with the Bank of England post too. Observers reckon Lord O'Donnell is an obvious philosophical fit with the Treasury. But they also warn that he wouldn't be entirely predictable: after so much time advising, he is itching to be the policy-maker himself.