Knight closes account with bankers’ body

Ms Knight, 61, announced her intention to step down after five years at the helm of the organisation.

She will leave her post this summer after acting as a spokeswoman for the industry through a “crisis of a magnitude that few if any have seen before or expected”.

The former Sheffield councillor, who took up the post on April 1 2007, represented the industry during the biggest run on a British bank – Northern Rock – the collapse of Lehman Brothers and the part-nationalisation of Lloyds Banking Group and Royal Bank of Scotland.

And Ms Knight has more recently been dealing with the ongoing bonus furore, fending off claims of unbridled excess and a fat cat culture in the City.

The Bristol University graduate said: “The UK banking industry has already undergone radical restructuring to make it fit for the future and I am pleased to have played a part in this.”

She will stay on while the search for her successor is completed, the BBA said.

Ms Knight added: “I have been at the British Bankers’ Association at a time of extraordinary difficulty and during a crisis of a magnitude that few if any have seen before or expected.

“The BBA has played a strong part throughout this challenging period and has helped the industry it represents with the significant changes to regulation and legislation required.”

She added: “I leave the BBA in good health and heart.”

Her successor will immediately face the task of defending the BBA itself against an international investigation into the alleged manipulation of the London Interbank Offered Rate (Libor) benchmark by contributing banks.

The BBA is to review how Libor is set but said it has no plans to cede oversight. The inquiry spans the United States, Europe and Asia as regulators assess whether banks and interdealer brokers attempted to rig the price.

“Getting a group of all the relevant parties in a manner to evolve Libor is not the easiest thing to have to do but it needs to be done,” said Ms Knight.

Other top challenges for her successor include dealing with big regulatory changes like the “ring fencing” of UK deposit-taking banks with extra capital, she said.

Prior to joining the BBA, Ms Knight was chief executive of the Association of Private Client Investment Managers and Stockbrokers from September 1997 to December 2006.

She was a Conservative councillor and chief whip on Sheffield City Council from 1987 to 1992 and entered parliament in 1992 before serving as economic secretary to the Treasury between 1995 and 1997.

Ms Knight previously set up and ran a specialist contract heat treatment company treating precision engineering components – Cook & Knight Metallurgical Processors.

Her brother, Andrew Cook, is chairman of Yorkshire steel castings firm William Cook Holdings, which has sites in Sheffield and Leeds.

In an interview with the Yorkshire Post last May, he said of Ms Knight: “She has the job from hell. She’s tasked with defending the banks, which is an extremely difficult task and I don’t think she gets the credit she deserves for it.

“It’s common knowledge they behaved recklessly and they have got off virtually scot-free.”