Britain on Friday named its top financial regulator, Andrew Bailey, to lead the Bank of England and help shepherd the lacklustre economy through the dislocation of Brexit. Finance minister Sajid Javid said the former BoE deputy would succeed Mark Carney on March 16 - six weeks after the Canadian-born governor had been due to step down. Carney's previous departure date of January 31 coincides with when Britain's separation from the European Union is meant to take effect, and Javid said Carney had agreed to stay on a while to ensure a "smooth transition".
The chancellor of the exchequer said of Bailey, the 60-year-old head of the Financial Conduct Authority (FCA): "Without question, he is the right person to lead the bank as we forge a new future outside the EU."
The Briton was the "clear front-runner" in the contest to succeed Carney, Javid said, describing Bailey as the "standout candidate in a competitive field". That field included two prominent women.
Bailey, who has spent most of his career at the BoE, will have the daunting challenge of conducting Britain's monetary policy as it unwinds nearly five decades of EU membership following Prime Minister Boris Johnson's election triumph this month.
Bailey said it was a "tremendous honour" to be chosen, "particularly at such a critical time for the nation as we leave the European Union". He pledged to continue Carney's work to ensure monetary stability and "safe and sound" financial institutions.
On Thursday, the central bank froze interest rates at 0.75 percent, but left the door open to a reduction in the event of fresh turmoil.
Economic growth turned negative in the second quarter before recovering in the third. Many economists say that it is likely to deteriorate if Johnson delivers on his vow to quit the EU on time and exit a subsequent transition period by the end of 2020.
Bailey may need to consider raising interest rates "back to more normal levels or fight the next downturn with not much ammunition" and defend the bank from "the growing risk of political interference", noted Ruth Gregory, economist at Capital Economics.
Cambridge-educated Bailey worked at the Bank of England in various posts between 1985 and 2016. He played a crucial role during the global financial crisis a decade ago and a subsequent vicious recession, overseeing the BoE's special operations to help troubled banks.
In a 2012 interview with the Financial Times, Bailey reflected on the bailout four years earlier of the crippled Royal Bank of Scotland.
The then RBS treasurer had come into his office "and I thought he was going to have a heart attack... and he looked at me and said I need £25 billion today, can you do it?" Bailey said, according to the FT.
"I said 'Yes, I can do that,'" he recounted.
The newspaper said the RBS official "looked shocked at Mr Bailey's cool confidence, but what he did not know was that Mr Bailey had already done the same thing for HBOS".
Bailey was a deputy governor for prudential regulation between 2013 and 2016, when he was appointed as head of the FCA, the watchdog for Europe's largest financial sector.
In that role, he has attracted criticism for lax oversight, particularly following the collapse this year of a flagship investment fund run by the money manager Neil Woodford.
John McDonnell, finance spokesman for the opposition Labour Party, said Bailey was "an establishment figure with what some consider is a less than inspiring record at the FCA".
Bailey, he said, would "need to demonstrate early that he appreciates the need to address the deep structural problems of our economy and, like Mark Carney, understands the climate change threat".
Carney, 54, who became a British national during his time in London, had already extended his tenure twice due to Brexit uncertainty. His next job is already lined up, as the United Nations special envoy on climate action and finance.
In one of his last big policy announcements, Carney this week said that Britain's banks - already subject to annual financial health checks since the crisis - face being stress-tested for risks posed by climate change under a new consultation.
Copyright Agence France-Presse, 2019
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