The CA who became the Bank of England's CFO
By CA magazine
4 May 2023
As CFO of the Bank of England, Afua Kyei CA has been at the table as the UK economy has faced recent severe headwinds. In this freewheeling conversation with ICAS CEO Bruce Cartwright CA, she discusses responding to turbulence, making the profession future-facing and the threat of climate change
When Afua Kyei CA was appointed CFO at the Bank of England in 2019, aged 36, she broke new ground, becoming the first black senior executive in the Bank’s 329-year history. She is arguably one of the most important CFOs in the UK. Indeed, since her appointment, the UK has endured a series of major shocks to the financial system, starting with the pandemic, followed by the war in Ukraine, the 2022 mini-Budget and the current cost of living crisis. Throughout these upheavals, the BoE has been entrusted with helping to provide a measure of stability.
As CFO, Kyei is responsible for the financial governance of the Bank’s £1trn balance sheet. She is also its executive co-sponsor for diversity, equity and inclusion (DEI) and climate change disclosure. More than that, Kyei is a role model and a mother of three young children. In this exclusive interview, she spoke to Bruce Cartwright CA about her career, how the Bank has dealt with the permacrisis and why the financial industry needs to promote greater diversity.
Bruce Cartwright CA: Let’s start by outlining how you’ve reached this point in your career.
Afua Kyei: I read chemistry at Somerville College, Oxford, then joined EY in London in the banking and capital markets audit team, where I trained with ICAS.
BC: I’m sure you well remember the blood and sweat involved in gaining your ICAS qualification.
AK: Exactly. We were back in the classroom. They were tough exams – everyone had at least one they didn’t like!
BC: I occasionally wake up in a cold sweat thinking I failed that tax exam…
AK: In 2007, I moved to UBS just as the financial crisis was emerging. I spoke some German and joined the group strategy and M&A team, and was mostly based in Zurich. My old team would now be working on the Credit Suisse acquisition, so recent events in the Swiss banking market had a personal as well as professional resonance. Then I moved into the European financial institutions group as an investment banker advising clients like RBS and other financial institutions experiencing challenges. After this, I joined Barclays, where I held various FD roles and I was the CFO of mortgages before joining the BoE.
BC: Going back to 2007, you went from an advisory role into the eye of the financial storm.
AK: When I joined UBS in 2007, there were thousands of bankers losing jobs across the sector. I have sad memories of people walking out of banks with cardboard boxes.
BC: You’ve progressed pretty rapidly since. What does your current role entail?
AK:During the pandemic, our balance sheet grew to over £1trn and I’m responsible for the financial governance of that balance sheet. I have been changing how the Bank funds its policy costs – this requires a change in primary legislation and is part of the proposed Financial Services and Markets Bill 2022. I manage the cashflows between the Bank and the Treasury. I lead on strategy and I’m a director on all the Bank’s subsidiaries, including the biggest one where we do quantitative easing and tightening. I speak at different forums like the IMF, G20 and World Finance Forum. I meet with chairs, CEOs and CFOs across the private and public sector and spend time with charities, and students at school and university, understanding the challenges they face and thinking about ways to help.
BC: What is the stated mission of the BoE?
AK: To promote the good of the people of the UK through maintaining monetary and financial stability. That’s our north star.
BC: We are both CAs. Some will think all we’re interested in is a solid balance sheet. But what you’re saying is that without purpose, the balance sheets are irrelevant.
AK: I would say the balance sheet is an outcome of the decisions we take. And the driver behind those decisions is seeking to do good for the people of the UK, how we improve things for society.
Accountancy allyship
BC: You are executive co-sponsor of diversity, equity and inclusion (DEI) at the Bank and you gave a speech at Mansion House last year where you spoke about “accountancy allyship”.
AK: To me, allyship is about helping people who are marginalised so their voices are heard and they can advance. DEI is a vital part of society and needs to be part of every organisation. I see a big opportunity across the accounting profession that transcends our business organisations and our professional bodies. Our profession can unite and influence some of the world’s biggest challenges – for example, the current cost-of-living crisis.
We can help stimulate the economy, help companies stay afloat and help with pricing decisions to create affordable products to boost productivity and create jobs. We can ensure resources are allocated to what matters most to help communities and businesses navigate, focus and unlock benefits to achieve better outcomes for society and the economy. We can influence climate change and ethically review the supply chains of businesses to understand better how the humanitarian consequences of the decisions we’re making actually play out.
BC: This is music to my ears. In Australia, they talk about accountants being “difference makers”. Where would you rate the profession on social inclusion?
AK: I think the profession is welcoming of people from different backgrounds, and people with different skills can flourish. Accountancy, relative to other professions, is more accessible and has many different entry points. In terms of the new generation, the apprenticeship schemes are helping. There is a preconception that you have to be amazing at maths, which isn’t true. There is more to do to embrace visible and invisible diversity. I don’t think there is enough awareness of the variety of options. Accountancy is something that can be passported across industries and internationally.
BC: You’ve talked about the importance of women being involved in finance. I’m delighted to say the gender balance of CAs now coming through is pretty much 50-50. But if that’s the case, then surely something isn’t right if women are not progressing as far as their male peers.
AK: We know there’s a very low number of female chairs, CEOs and CFOs across the FTSE 350, so we need to build strong pipelines. Frankly, everybody should be supported to be successful. People should be given equal opportunities to develop their skills and capabilities. It can be about building people up to be the best they can be. Having a culture of transparency, where people can have honest conversations about how they’re doing and their lived experience, is incredibly powerful. We’ve seen the benefits of mentors, allies and sponsors.
BC: Are you saying the difference now is that people are actively taking responsibility for it?
AK: I think originally, there was thought to be a meritocracy, where the best people get ahead. However, we know people are supported in different ways and it is easier to progress if you have people backing you to be successful, so active mentoring and coaching matters. There’s been a lot of focus on unconscious bias. Some people will say, “I haven’t actively acted in a way that means we don’t have equal representation.” But, if you flip it over and say, “What are you doing, what active steps are you taking, to ensure you have that representation?”, that’s a very different way of thinking about it.
BC: Do you feel you’re having an impact as DEI co-lead?
AK: I dedicate a lot of time to understanding the lived experiences of individuals and intersectionality of diverse groups across the Bank and in different communities through my external engagements. When someone says to me “it’s so good to discuss this with someone who gets it, ” or “it’s reassuring to know the Bank has someone like you”, I feel I am having an impact.
I was very much involved in the Bank of England’s court review of ethnic diversity and inclusion commissioned by our board in 2020. We put our hand up and said where we were falling short. We have more to do.
Storm warning
BC: Another major issue is sustainability. What role does the Bank play here?
AK: Climate change has major implications for our economy and financial system. The physical effects and the transition to net zero create major financial risks and economic consequences. That can affect the soundness of the firms we regulate and supervise, which of course affects the stability of the whole financial system and the economic outlook. So, climate change is integral to the Bank’s mission to maintain monetary and financial stability. It’s one of our strategic priorities.
I attended Cop26 in Glasgow and it was incredible to hear from a number of national and industry leaders. I even had the honour of
sitting next to King Charles (as he is now) at an event at Kelvingrove Art Gallery and Museum where he was hosting a discussion on biodiversity and the natural and built environment. I’d encourage all leaders to actively engage with the climate agenda and embed this into their work.
BC: Do you think the dial has moved on this? Twenty years ago, people were already talking about it as a strategic priority, but it was only a priority if the economics allowed…
AK: Yes the broader benefits beyond the economic are driving this. At the same time, the economic business case is a way to encourage people to focus on this.
At the Bank, we are conscious of the impact of our financial operations on the climate. For example, the financial asset portfolios that we hold on our balance sheet, the emissions we produce from our buildings, and the printing of banknotes are performed to best practice. We were recently recognised by the City of London Corporation in its Clean City awards for reducing carbon emissions in our own operations, as well as in our procurement and supply chain. Since 2020, we’ve published our TCFD-aligned climate disclosure report every year alongside our annual report and accounts. The most challenging part of that is how we include the analysis of the emissions associated with our monetary policy portfolio. We’ve been the first central bank to do this.
BC: It’s not an easy task to say, “As we adapt monetary policy [to the fight against climate change], what is the impact?” That takes a bit of thinking...
AK: It does. For example, we announced we were greening our corporate bond portfolio – so when we purchase corporate bonds, we look at how far the companies have gone to move towards the guidelines being proposed. We penalise and incentivise through the tilting measures we adopt in terms of what the eligibility criteria are for purchasing corporate bonds.
BC: On to more macro matters. We do, as the Chinese saying goes, live in interesting times. And the BoE must be more interesting than most as the dynamics change. How much warning do you get of, say, growth plans and mini-budgets? Is it an ongoing discussion where you can see the direction of travel?
AK: There was a heightened level of turbulence at the time. The pandemic was a crucial time for the Bank to ensure it did everything it could to provide stability. One of the things I was involved with, as a director, was helping to set up a new entity, the Covid corporate financing facility, to help provide stability. We did this in only five days, so a short turnaround time. After the mini-Budget, the Bank had to react very quickly to the information in the public domain. We had to consider its impact on the broader economy, on the monetary policy and financial stability decisions we could make to try to provide some stability in the markets. And, again, putting society first.
For example, when the Bank announced a temporary and targeted intervention in September to restore market functioning in long-dated government bonds and reduce risks from contagion to credit conditions for UK households and businesses. In line with our financial stability objective and in order to avoid dysfunction in core funding markets, the purpose of these operations was to enable liability-driven investment funds to address risks to their resilience from volatility in the long-dated gilt market.
As a central bank, we have to act quickly because if you don’t the ramifications are severe.
BC: There’s a saying that perfection is the enemy of progress. When you’re making those decisions over several days, you’re pretty sure it’s not going to be perfect. But if you don’t make a decision, the ramifications are far worse.
AK: We have to be able to react to the unexpected, to plan for it and to make timely decisions with the best available information, even when there are many unknowns. In those situations, you need to collaborate more than ever to understand the potential impact. You need to involve people from across the business to get a range of inputs, a diverse set of views. That way, you can challenge yourself on your assumptions and anticipate what could go wrong. The Bank has a very strong governance culture.
BC: What’s happening in the UK economy? Are we coming out glass half empty or half full? I appreciate you’re not the Chief Economist, but you’ll have a view.
AK: I certainly do! We are living in such difficult times and responding to the cost-of-living crisis is absolutely a key priority for the Bank. So many members of society and businesses are struggling with their day-to-day finances and have been affected deeply by the current situation. I am often asked, “When are things going to change? I can’t afford my bills or my rent.” My colleagues and I share the responsibility we have to society and we keep the people who are affected by our decisions at the forefront of our minds as we work on solutions to the challenges we’re facing.
Looking ahead, you may have read the MPC’s [Monetary Policy Committee] March summary which noted that wholesale gas futures and oil prices have fallen materially and global growth is expected to be stronger than projected in the February monetary policy report. GDP is still likely to have been broadly flat around the turn of the year, but is now expected to increase slightly in the second quarter, compared with the 0.4% decline anticipated in the February report. The labour market has remained tight, and the near-term paths of GDP and employment are likely to be somewhat stronger than expected previously.
BC: We have 4,500 students in training. What advice would you give them?
AK: Build relationships and get involved in things you’re passionate about – then it won’t feel like hard work because you’ll be enjoying it. And keep learning, take risks, move around… there’s plenty of time for trial and error and there’s no “right” path. When the opportunities come, take advantage, because you don’t know when the next one will come up.
BC: Thank you for taking time out to talk to us, Afua. I wish you the best of luck with your future career.
AK: Thank you, Bruce.
Since joining the Bank as CFO in June 2019, Afua Kyei has been witness to some extraordinarily turbulent times.
December 2019
The UK general election returns the biggest Conservative majority since 1987.
March 2020
As Covid-19 hits the UK, the first lockdown is announced, followed by the Job Retention Scheme, aka furlough.
January 2021
After several years of wrangling, the UK formally leaves the European Union.
October 2021
As supply chains falter, inflation passes 4% for the first time in a decade.
February 2022
Russia invades Ukraine; the West retaliates with sanctions, sending gas prices soaring.
August 2022
Inflation passes 10% for the first time in 40 years.
September 2022
The mini-Budget growth plan sees taxes slashed, panicking markets and pushing the pound to an all-time low vs the dollar.
October 2022
Rishi Sunak becomes Prime Minister, the UK’s third in less than two months.
March 2023
The Bank lifts interest rates to 4.25%, the 11th consecutive rise since December 2021.
From CA to CFO
Katie Murray CA, Group CFO, NatWest
Murray joined NatWest as Director of Finance in 2015 and was appointed Deputy CFO in March 2017, before being promoted to Group CFO in January 2019. She backs female career progression through not-for-profit organisations such as 25x25 and she champions companies trying to make the transition to net zero.
Kathryn Robertson CA, Head of Enterprise, Macquarie Asset Management
Robertson was CFO for Banking and Financial Services at Macquarie in Australia, then moved to New York in 2021 to become Head of Enterprise at its asset management arm. She is a member of the women’s executive network, Chief, named one of Fast Company’s Most Innovative Companies of 2021.
Steph Williams CA, CFO, ANZ
Williams was appointed CFO for Singapore and South Asia of the ANZ banking group in January 2022. She moved from the UK to east Asia soon after qualifying as a CA, becoming a consultant for Accenture. She is a facilitator at ANZ’s financial literacy training programme and delivers training to young people from low-income backgrounds in Singapore.
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