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Andrew Bailey wins race to become Bank of England governor

Andrew Bailey, chief executive officer of Financial Conduct Authority, speaks during a Bloomberg Television interview in London, U.K., on Tuesday, April 23, 2019. The Bank of England needs to do more to meet its diversity targets for senior roles, according to minutes from its February Court of Directors meeting. Photographer: Chris J. Ratcliffe/Bloomberg

Andrew Bailey wins race to become Bank of England governor Chief of Financial Conduct Authority to be 121st head of central bank Andrew Bailey, chief executive of the Financial Conduct Authority

Andrew Bailey will become the 121st governor of the Bank of England in February, 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.

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.

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 has been rocked by financial scandals. Mr Bailey has suffered a difficult year at the Financial Conduct Authority, 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 has 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. Canadian Mark Carney has led the BoE since 2013 © Reuters Then there was the implosion of Neil Woodford’s flagship equity fund, which froze £3.7bn of investors’ money, also raised questions — including from City grandees such as Lord Myners — about whether the FCA was slow to react to the unfolding 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. Favourites to replace Mr Bailey are thought to include Megan Butler, the FCA’s head of supervision, and Chris Woolard, its head of policy and strategy. 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.

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