Andrew Bailey has been named as the next governor of the Bank of England.
Mr Bailey, aged 60, is currently chief executive of the Financial Conduct Authority (FCA), the City watchdog.
He will become the 121st governor of the Bank of England on 16 March, taking over from Mark Carney, and will serve a full eight-year term.
The search for the new governor began in April and Mr Bailey, who spent more than 30 years at the Bank, was seen as an early favourite for the job.
However, the FCA has faced criticism in recent months over its regulatory scrutiny of the flagship fund of one of the UK’s best known money managers, Neil Woodford. The fund was suspended in June and eventually closed with investors expected to lose large sums of money.
And its report into Royal Bank of Scotland’s treatment of small business by its controversial restructuring division was called a “whitewash” after it recommended taking no further action against the bank.
Announcing the decision to appoint Mr Bailey, Chancellor Sajid Javid said he was “the stand-out candidate in a competitive field”.
The decision means hopes that the Bank could have been led by a female governor for the first time in its history have been dashed.
Minouche Shafik, a former member of the Bank of England’s interest rate-setting committee, had been hotly tipped for the role.
However, the FT reported that Dame Minouche, who is director of the London School of Economics, was informed this week that she was no longer in contention.
Mr Bailey has spent almost the entirety of his career at the Bank of England, which he joined in 1985.
He has held a number of roles including chief cashier, which meant that his signature appeared on all bank notes issued by the Bank of England.
Mr Bailey was cash cashier during the financial crisis when, he recalled in an interview: “The [RBS] treasurer, John Cummins, came in and I thought he was going to have a heart attack… and he looked at me and said: ‘I need £25bn today, can you do it?’. I said: ‘Yes, I can do that’.”
Mr Bailey was also a deputy governor and head of the Bank’s prudential regulation division, before joining the FCA as its chief executive in 2016.
Andrew Bailey was the early frontrunner for one of the most powerful positions in the UK.
However, his time as head of the City watchdog, the Financial Conduct Authority, was peppered with a number of high-profile controversies – including its handling of complaints into RBS’s treatment of small businesses in the aftermath of the financial crisis – which many thought might have harmed his chances for the top job.
He is highly thought of by colleagues and civil servants.
Former Permanent Treasury Secretary Lord McPherson described him as the most able and competent Bank of England official he had ever worked with, adding that while Bailey would not make waves for the government he had the backbone to stand up to it.
Mr Bailey is taking over at a fraught time for the Bank of England.
It emerged this week that an audio feed of sensitive market information from the Bank had been leaked to fund managers.
The Bank admitted one of its suppliers had “misused” the feed which gave traders early access to information that could potentially generate large sums of money.
The matter has been referred to the FCA, which Mr Bailey currently leads.
The City watchdog said it was “looking at the issue”.
Why the Bank of England Governor matters to you
It may sound old-fashioned to say it, but the Bank of England Governor matters to you as much if you live in Northern Ireland, Scotland or Wales as if you live in England.
Whereas you’ll find the Bank of Scotland’s name on printed notes, the Bank of England doesn’t just do the same in England.
It supervises the financial system wherever sterling is the currency, seeking to ensure it is stable and no banks are running out of cash.
But its most important role is to try to control the cost of borrowing money by setting the official interest rate. That is likely to be a key determinant of the cost of real interest rates: your mortgage; your car loan or your business loan and the returns you get on your savings.
The governor chairs the Monetary Policy Committee which is a nine-person group of economists who decide whether interest rates should rise, fall or remain unchanged.
Raising them can help slow the economy down so it doesn’t overheat in the form of prices rising too fast. Lowering rates can help prevent the economy slowing down too severely by making it cheaper to borrow.
Because of the vast sums of money traded on the foreign exchange markets, traders listen obsessively to the governor’s words for any hints about where interest rates are going. Positive or downbeat comments can affect the value of the pound.
The governor must be careful about what they say – which means they’re not always the most exciting people to listen to.