Former governor of the Bank of England in charge during the BCCI collapse and ERM crisis
A note slipped to Margaret Thatcher during a reception at No 10 Downing Street led to Sir Robin Leigh-Pemberton, later Lord Kingsdown, being appointed governor of the Bank of England in 1983. Leigh-Pemberton, who has died aged 86, held the post for two five-year terms. He had never appeared to seek the governorship, but to Thatcher he seemed the ideal candidate. Her phrase "one of us" fitted: he was the right sort, a loyal Conservative who spent years as leader of Kent county council. He was also, conveniently, a banker, being chairman of National Westminster.
However, before his second term was over, far from being "Thatcher's poodle" as critics of his appointment had feared, he proved determined to take his own line on European monetary union and Thatcher refused even to speak to him.
They had met when he was chair of the Committee of London Clearing Bankers. At a reception to discuss what more the City could do for industry, he surreptitiously handed her the briefing note he had been given for the occasion by one of the committee's economists. She slipped it into her handbag and, on the strength of it, decided that Leigh-Pemberton – unlike most others she had met from the City – was somebody with whom she could do business.
The City disagreed. He was not the right sort of banker. His name had not been included on the list of candidates prepared for her, because he was not from one of the 16 accepting houses which ran the money markets. In fact, they muttered, he was not really a banker at all, but a country landowner and barrister who had found himself elevated, in 1977, to the NatWest chair. His experience of international banking was virtually non-existent.
So alarmed were the insiders at the Bank that, before he arrived, they set up a committee which, in effect, would take the important executive decisions. Each Friday morning the committee would meet under the chairmanship of deputy governor Kit McMahon to decide how the Bank's business was conducted. Leigh-Pemberton, however, was no fool. While he was content to delegate certain technical elements of the Bank's administration to the committee, and acted more as chairman of the board than as chief executive, he saw that power had to be clawed back.
Perhaps because of his background – Eton, Oxford, the Grenadier Guards and the law – and his languid way of speaking, which exaggerated the sense that Leigh-Pemberton was just a member of the landed gentry and not especially bright, the technocrats underestimated Leigh-Pemberton. While he was most definitely a country gentleman with a 2,200-acre agricultural estate in Kent, he was quick to pick up the essentials of any situation – and he was decisive in what should be done about it. He was not to be sidelined.
His first step was to demand to see the minutes of the committee's meetings. Next, he insisted on seeing the agenda before the meetings. Thus armed, he made sure the deputy governors were aware of his position on the issues which concerned him. In that way, he succeeded in pulling back power without the need for confrontations.
He was, however, essentially a delegator, albeit an informed one who sensed when it was necessary to take control of a situation. Meanwhile, he continued to spend some time each week on his other job as lord lieutenant of Kent. His private office needed to know when to lay out his sword and fancy uniform. An additional pennant was fitted to the official Rolls-Royce to fly his flag. On weekdays, he lived in the governor's flat at the New Change office building overlooking St Paul's Cathedral; he installed beehives on the building's roof. He effortlessly entertained the great and good, including the Queen, and travelled the world, getting to know other central bankers. They liked to visit each other's country estates – the clubbable newcomer fitted in well. He joined Jacques Delors's committee to design the template for economic and monetary union.
In 1984 the governor was faced with the collapse of Johnson Matthey Bankers, which had made huge loans to customers who turned out to be not creditworthy. He flew back from America to take control of negotiations throughout a Sunday night. Before the markets opened on Monday, the bank announced it had bought JMB for £1 and would meet its liabilities.
His decisiveness caused a huge problem with the chancellor of the exchequer, Nigel Lawson, who had assured the House of Commons that "no public money" had gone into the rescue. When it emerged that the Bank had provided £100m to keep JMB afloat, Lawson felt he had been misled. Neither the house nor the public at large shared the Bank's fine distinction between capital and liquidity, nor between the Bank's own capital and public money. There was also considerable criticism of the Bank's regulatory competence.
Events were moving quickly in Europe, particularly after Delors took over as president of the European commission in 1985. Leigh-Pemberton argued that sterling should join the European exchange rate mechanism, as did Lawson, but failed to convince Thatcher. In the end, Britain joined the ERM in 1990 only to be forced out two years later despite the Bank's selling of huge amounts of reserves to try to maintain the rate.
In 1985, the City was also gearing up for deregulation of the securities industry, with the deadline for "Big Bang" set for October 1986. Despite a couple of early technical blips, deregulation went smoothly enough, but within a year the market crashed. The government was in the throes of selling off a large tranche of BP shares. The sale price had been fixed but the market price of BP slumped.
Leigh-Pemberton was again overseas, and Sir Hector Laing's private jet was sent to collect him. Lawson wanted the City underwriters to shoulder the losses they had agreed to risk on the world's largest ever share sale. Leigh-Pemberton sided with the City and tried to persuade him to cancel the sale. Lawson felt totally let down.
The other major crisis that Leigh-Pemberton had to face was the closure in 1991 of the Bank of Credit and Commerce International. Again there was criticism of the Bank's supervisory regime, not helped when Leigh- Pemberton told a Commons committee that in the City, BCCI had been known as the "Bank of Crooks and Cocaine International".
Not every crisis involved high finance. On one occasion, he was abroad when telephoned by a frantic Bank official to be told his bees had swarmed and invaded the offices below. When asked for advice he said "Put them in a box" and rang off. Eventually, when the office roof was needed to accommodate air-conditioning equipment, he took the hives home in the back of his car.
Throughout the highs and lows of his two terms, he was a cheerful, approachable and well-liked figure. He invited staff down to the family estate of Torry Hill, which includes a cricket field – he played for the Bank's team – and a narrow gauge steam railway, complete with viaduct and tunnel, on which Leigh-Pemberton, wearing an engine driver's cap, would take his visitors for rides.
After retiring in 1993 he was created a life peer as Lord Kingsdown and joined several boards and committees, with directorships of Redland, Glaxo Holdings and Hambros.
In 1953 he married Rosemary Forbes, daughter of the Dowager Marchioness of Exeter. Rosemary survives him, as do four of their five sons.
• Robin (Robert) Leigh-Pemberton, Baron Kingsdown, banker, born 5 January 1927; died 25 November 2013