Andrew Bailey, the head of the UK financial watchdog, has been named as the next governor of the Bank of England.
The chancellor, Sajid Javid, announced the replacement for Mark Carney, who is to stand down from the role after six and a half years in the job. Bailey is the chief executive of the Financial Conduct Authority.
Bailey’s appointment comes after the government put the appointment process on hold because of the general election and continuing uncertainty over Brexit. As head of the City watchdog, he is viewed by observers as a safe pair of hands with extensive experience as a former deputy governor at the Bank.
His appointment is widely seen widely as a demonstration of continuity at a time of mounting concerns about the UK economy. Carney, who had been due to leave at the end of January having already extended his term, will now step down on 15 March to ensure an orderly transition, according to the Bank.
Javid said Bailey, 60, would start on 16 March, and that the Commons Treasury committee would have time to hold a pre-appointment hearing.
Among his first tasks will be to steer the UK economy and financial system through the Brexit process and trade talks with Brussels next year. He is also expected to scrutinise internal controls at the bank after it emerged this week that hedge funds had been able to access audio feeds of Carney’s press conferences ahead of the rest of the market, opening an opportunity for profitable currency trades.
The chancellor added: “Andrew was the standout candidate in a competitive field. He is the right person to lead the Bank as we forge a new future outside the EU and level-up opportunity across the country.”
Questions over Bailey’s suitability have been raised after a series of scandals on his watch as head of the FCA. These include the handling of an investigation into the Royal Bank of Scotland’s global restructuring group unit, and the oversight of the multibillion-pound equity income fund the former star stock-picker Neil Woodfood managed until it was suspended in June.
However, Javid defended the choice of Bailey, saying the veteran central banker had “experience, the record and the character” for the job and that he was “without doubt the best candidate”.
Praising his rigour and intelligence, the chancellor said Bailey had enhanced his status during the 2008 financial crisis when he led the Bank’s team responding to the implosion of the banking sector. Having previously worked at the Bank for his whole career before leaving in 2016 to run the FCA, Bailey has held several top positions at the central bank, including deputy governor.
His appointment was announced on Friday in the same room at the Treasury where Gordon Brown declared the independence of the Bank of England in 1997, and comes at a time of mounting political pressure on Threadneedle Street and other central banks around the world.
Carney had faced intense criticism for his warnings over the potential impact of Brexit on the UK economy. There has been speculation that Boris Johnson was interested in appointing Gerard Lyons, a close ally and supporter of Brexit who was his economic advisor as London mayor.
There have also been questions over the future structure of the civil service as Johnson looks to reshape Whitehall, making it an overtly political operation.
Javid is understood to have decided on Bailey. On Friday, the chancellor was at pains to stress the Bank’s independence, which the City regards as vital for maintaining Threadneedle Street’s credibility.
“It is striking that even at a time where there are very different views on the best way to run our economy, all parties agree that the independence of the Bank of England is essential to a strong economy,” Javid said.
Bailey, who will become the 121st governor in the Bank’s 325 year history, is to serve an eight-year term and will be paid £495,000 a year. His overall pay and pensions package is expected to be less than Carney’s.
Bailey’s selection will be regarded by many observers as a missed opportunity to appoint a woman to lead the central bank for first time . The shortlist is understood to have included two women, Minouche Shafik, a former Bank deputy governor who is now director of the London School of Economics, and Shriti Vadera, the Labour peer and investment banker who chairs Santander UK. There have also been questions over whether the UK could attract a leading international figure at a time of heightened political turmoil over Brexit.
Kevin Walsh, a former member of the US Federal Reserve’s board of governors, was also thought to have been in the running.
