Turner urges bold action for growth Britain needs leaders willing to tear up the rule book for both monetary policy and bank regulation to combat the aftermath of the financial crisis and spillover from the eurozone, Lord Turner, head of the Financial Services Authority, said yesterday. Citing quantitative easing, the government's Funding for Lending scheme and the City watchdog's decision to loosen bank safety rules, Lord Turner told a financial sector audience that Britain had already moved "far outside past orthodoxy" and might have to go further if the economy did not improve. "We need to be ready if these measures prove insufficient to consider further policy innovations, and further integration of different aspects of policy - to overcome the powerful economic headwinds created by deleveraging across the developed world economies," Lord Turner told the annual City banquet at the Mansion House, according to a prepared text. Although the FSA chairman never mentioned that he had applied to replace Sir Mervyn King as a potential governor of the Bank of England, the speech highlighted his willingness to take bold and unorthodox action to promote growth. Lord Turner, Paul Tucker, a deputy governor, and Sir John Vickers are among the leading candidates to take charge of the BoE, which will have expanded powers next year. Paddy Power, the bookmaker, puts even odds on Mr Tucker. Sir John is at 4-1 and Lord Turner 9-2. The speech highlighted how Lord Turner has spearheaded efforts to revamp regulation and supervision at the FSA and on the global level, underlining his appeal to those who want culture change at the BoE. Sir Mervyn has been criticised in some quarters for keeping a tight grip on power and promoting orthodoxy of thought. At the FSA, Lord Turner said, he led two examinations of how the regulator failed before the financial crisis. "The FSA made mistakes, acknowledged them and changed radically in response," he said. The BoE has never given a public account of its role before the collapse of the banks except for commissioning a limited review of how it provided liquidity support to failing banks. BoE critics have also warned that the next governor has an impossibly large role, which will include heading the committees in charge of monetary policy and financial stability and chairing the new BoE arm that will regulate banks and insurers. Sir Gus O'Donnell, the former cabinet secretary, recently told the Financial Times that the new governor "needs to be a delegator and a leader," even as he took his own name out of contention. At the Mansion House, Lord Turner said he fitted that bill by pointing out that at the FSA he had delegated prudential regulation to Andrew Bailey and conduct regulation to Martin Wheatley, giving each the freedom to develop new policy approaches. "I am confident this programme of reform will result in a future banking and financial system less likely to wreak havoc in the real economy, which our past failed system did in 2008, and better equipped to play its vital roles in serving the real economy," Lord Turner said. David Wootton, the Lord Mayor of the City of London and host of the event, agreed, but he warned Lord Turner and others not to go overboard in their efforts to toughen up regulation. "A regime that puts fear at the top of its list of weapons will not get the best results in the long term," he said.