Andrew Bailey appointed new governor of Bank of England
Chancellor Sajid Javid chooses head of the FCA watchdog despite history of controversies
Financial Conduct Authority chief executive Andrew Bailey has been appointed to succeed Mark Carney as governor of the Bank of England.
Bailey was previously deputy governor of the United Kingdom central bank, but has had a controversial tenure at the FCA, the country's financial services watchdog, which has experienced a number of scandals during his time.
The implosion of fund manager Neil Woodford’s main equity fund, which controversially froze £3.7bn ($4.8bn, €4.3bn) of investors’ money, caused some to ask whether the City watchdog was sufficiently on guard.
The FCA report into the Royal Bank of Scotland's treatment of small business by its controversial restructuring division was labelled a "whitewash" after it advised no further action against the bank.
A statutory inquiry was opened into the FCA itself, over its handling of the London Capital & Finance scandal. Court documents allege that four executives at the failed fimr pocketed £20m in the months before it collapsed and that £236m of investments held by first-time investors and pensioners may be wiped out.
Conservative Chancellor of the Exchequer Sajid Javid, who announced the appointment, said Bailey was "the stand-out candidate in a competitive field". However the opposition Labour Party's shadow chancellor, John McDonnell, emphasised Bailey’s “less than inspiring record at the FCA”, describing him as an “establishment figure”.
Bailey will be paid £495,000 but, unlike the Canadian Carney, will not receive a housing allowance. The 60-year-old described his appointment as a “tremendous honour”, adding: "The Bank has a very important job and, as governor, I will continue the work that Mark Carney has done to ensure that it has the public interest at the heart of everything it does."
Bailey was frontrunner for the post and market reaction was muted. By early afternoon trading the FTSE100 was up 0.15 per cent at 7,585.47, while the more UK-based FTSE250 continued Thursday’s slide, down 0.36 per cent at 21,584.00.
Although it is not clear how hawkish or dovish Mr Bailey will be in the next eight years, his record as the BoE’s chief cashier during the global financial crisis of 2008-09 would indicate that he is not indisposed to interventionist policies. Boris Johnson's ruling Conservatives are likely to welcome the departure of Carney, who was often seen as anti-Brexit.