Andrew Bailey will become the 121st governor of the Bank of England, chancellor Sajid Javid announced on Friday, capping his long career at the central bank and in financial regulation with the top job.
Mr Bailey won the race to succeed Mark Carney and embark on an eight-year term at the helm of the BoE after a selection process that has dragged on for almost two years and been overshadowed by Brexit.
Mr Javid said Mr Bailey was the “standout candidate” for governor who “emerged from the financial crisis with his reputation enhanced”.
The Treasury said that, to provide for a smooth transition, Mr Carney would complete his term on March 15 and Mr Bailey would take over the following day.
The 60-year-old is highly respected by staff at the BoE, having previously served as deputy governor for prudential regulation, chief cashier and private secretary to Eddie George, a previous governor. Since 2016, he has been chief executive of the Financial Conduct Authority, the regulator of the financial services industry, taking the job as a “safe pair of hands” with the expectation that he would one day become governor.
In a statement, Mr Bailey said he was honoured to take on the role and pledged the BoE would have “the public interest at the heart of everything it does”.
“It is important to me that the bank continues to work for the public by maintaining monetary and financial stability and ensuring that financial institutions are safe and sound.”
Overnight, Nicholas Macpherson, the former permanent secretary to the Treasury, described Mr Bailey as “the most able and competent BoE official I worked with — by far the steadiest under fire in the financial crisis”.
Mr Bailey was an early frontrunner for the governor job, as well as the bookmakers’ favourite in 2018, but his odds had steadily widened because the previous chancellor, Philip Hammond, publicly sought a candidate who would turn heads in international meetings, and his tenure at the FCA was rocked by financial scandals.
Until recently, the Treasury had sought another rock star central banker to echo the tenure of Mr Carney, but more recently Mr Bailey’s deep experience gradually won over the chancellor.
It did not matter that Mr Bailey had suffered a difficult year at the FCA, into which he was parachuted from the BoE in 2016.
Initially, he was praised for his pragmatic approach to Brexit but in recent months, he had to deal with a series of headline-grabbing financial scandals that have particularly hurt retail customers. A total of 25 cross-party MPs in the last parliament called for Mr Bailey’s resignation.
First came the collapse of London Capital & Finance, which pushed unregulated mini bonds on 11,600 bondholders, including pensioners and first-time investors, who now face having their £236m of investment wiped out. The episode has prompted regulatory and criminal investigations, as well as a statutory inquiry into the FCA itself and whether it missed several red flags about LCF.
Then there was the implosion of Neil Woodford’s flagship equity fund, which froze £3.7bn of investors’ money, and raised questions — including from City grandees such as Lord Myners — about whether the FCA was slow to react to the deterioration at Mr Woodford’s fund.
Educated at a Leicester grammar school and Cambridge university, Mr Bailey’s first job was as a research officer at the London School of Economics. He joined the BoE in 1985. He led the Prudential Regulation Authority in the BoE from its creation in 2013, serving as a deputy governor.
The appointment means the FCA will be without a chief executive at a crucial time as the UK is set to leave the EU, with Boris Johnson, prime minister, promising to “get Brexit done” by the end of January.
Mr Bailey will be paid £495,000 and be part of the standard BoE pension scheme. Unlike Mr Carney, he will not receive a housing allowance.
Mr Bailey beat several external candidates to get the governor’s job including Minouche Shafik, director of the London School of Economics; Shriti Vadera, chair of Santander UK and an aide to prime minister Gordon Brown during the financial crisis; Gerard Lyons, previously Boris Johnson’s economic adviser as London mayor; and Kevin Warsh, a former member of the US Federal Reserve’s board of governors.
Ben Broadbent and Jon Cunliffe, the two deputy governors, had also been hopeful that they might be in line for a promotion.
This article has been amended to clarify the date Mr Bailey will start as governor