The Bank of England's insurance regulator has been appointed the new deputy governor of the central bank responsible for day-to-day bank supervision, Britain's finance ministry said on Friday. Sam Woods will become head of the central bank's Prudential Regulatory Authority, where he is now executive director of insurance supervision. He will take over on July 1 from Andrew Bailey, who will head Britain's Financial Conduct Authority.
"I believe Sam is the best person to ensure that these vital reforms he helped design will be a success and to deliver a strong, secure and globally competitive regime for all financial services," finance minister George Osborne said in a statement. Woods was not among those touted in the media as a contender for the job. Lawyers said his appointment was probably intended to avoid controversy, unlike the appointment of Bailey to head the FCA, which had been announced earlier.
Bailey is replacing Martin Wheatley, a hardliner who was ousted by Osborne, in a move widely criticised as a retreat from close scrutiny of British banks. "The Bank is much more associated with continuity than revolution since 1694," said Rob Moulton, a financial services lawyer at Ashurst. "You wouldn't want two revolutionary leaders for the two regulators at the same time. It suggests an ultimate triumph of the BoE, that they produce their own replacement at the PRA and take over the FCA," Moulton said.
Woods has been appointed for a renewable term of five years. A former banking supervisor, more recently he has been overseeing the introduction of new European Union insurance capital rules known as Solvency II that came into force in January, the PRA's biggest single task in the past year. "Sam is a dedicated public servant a forward-looking policymaker and a natural leader," BoE Governor Mark Carney said.
Woods spent 10 years at the finance ministry before joining what was then the Financial Services Authority in 2011. He transferred to the BoE in 2013. With Osborne looking for a more accommodative attitude towards the banks, lawyers said they were not surprised that an internal candidate was chosen to head the PRA, which has taken pragmatic stance in its dealings with lenders.
"The PRA seems to be on a safe course and doing well, so continuity makes sense," said Etay Katz, a financial services lawyer at Allen & Overy. "You are looking at a relatively young organisation with a good sense of direction, so why would you want to have anyone but a capable internal to take it forward?" Katz said.
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