Mark Carney’s successor as governor of the Bank of England has been confirmed as Andrew Bailey, who is currently the chief executive of the Financial Conduct Authority watchdog. The appointment was made by Sajid Javid, Chancellor of the Exchequer, and Mr Bailey will take over from the incumbent on March 16th next year. Mr Carney was originally due to step down on January 30th but has agreed to stay on for an extra month and a half to ensure ‘an orderly transition’.
The choice of Mr Bailey will come as a surprise to many. The FCA has come in for no small amount of criticism over the past few years, particularly on a perceived failure to protect retail investors from riskier financial and investment products, and Mr Bailey has been in charge since 2016.
However, before taking over the role of chief executive of the FCA, Mr Bailey had spent 30 years working within the Bank of England. He is considered to have excelled in his role dealing with the banking crisis in the aftermath of the 2008 financial crisis. It is his professional record in the bank, rather than the few years spent with the FCA that informed the opinion expressed by Mr Javid that he was the “stand-out candidate in a competitive field with both international standing and experience of running a large complex organisation”.
Mr Javid added:
“It is a tribute to his integrity that he emerged from the most serious crash in living memory with his reputation enhanced.”
However, at the FCA, Mr Bailey was considered to have been slow to respond to several financial scandals that saw ordinary investors lose significant sums of money. That record was pointed to by critics of today’s appointment.
Gina Miller, the anti-Brexit campaigner and wealth manager, is quoted in The Times as commenting:
“It’s absolutely scandalous — if you look at his record at the FCA and what has happened under his watch — to have someone like that now in charge of Bank. He intervened after things. If you look at all the things on his watch, the culture has been to do things at the very last minute.”
The appointment of the new governor of the Bank can be regarded as particularly important this time given the added complication that the UK’s EU exit will add to the role. Responsible for the committees that set interest rates and the UK’s monetary policy, Mr Bailey will be the most important figure in the country when it comes to the cost of borrowing as well as how banks operate as businesses. Despite the fact that the Governor of the Bank of England is appointed by the Chancellor of the Exchequer, the Bank is independent of the government and makes its own decisions on policy.
Mr Bailey’s basic salary will come in at £495,000 compared to his predecessor’s £480,000. However, Canadian Mr Carney received an additional £250,000 living allowance.