U.K. Picks Andrew Bailey as Post-Brexit BOE Governor, FT Says
Before the FCA, Bailey spent three decades at the BOE, potentially making him a safe pair of hands.
(Bloomberg) -- Andrew Bailey has been chosen to succeed Mark Carney as governor of the Bank of England, according to the Financial Times.
U.K. Chancellor of the Exchequer Sajid Javid will reveal the appointment on Friday. Bailey, current head of the Financial Conduct Authority, had long been seen as a contender for the post, though recent speculation has focused on Minouche Shafik, a former deputy governor who would have been the first female head of the central bank.
Before the FCA, Bailey spent three decades at the BOE, potentially making him a safe pair of hands. Still, some thought his candidacy may have been weakened by recent criticisms that he’s been a soft touch on financial misconduct.
This year alone, he’s faced scandals from London Capital & Finance to the collapse of the investment empire run by Neil Woodford. The run of bad news raised questions about his oversight of the financial industry, and appeared to damage his chances of securing the top job at the three-century old central bank.
The choice of a man could also attract criticism for the government’s failure to address gender diversity at the bank.
Coincidentally, the report of his appointment came on a day the FCA was asked by the BOE to investigate another scandal -- the “misuse” of the audio broadcast of some of the central bank’s press conferences that might have given traders an unfair advantage.
If the 60-year-old is confirmed on Friday, it’ll bring to a close a process long delayed by political turmoil over Brexit and a general election. That led to an extended period of speculation about who would get the job, and there were even suggestions that the government might ask Carney to stay on in the role. He has already extended his term twice.
Bailey’s inside knowledge of the BOE, and London’s financial district, will come in helpful given he’ll have relatively little time to get up speed. Even if named on Friday, the new governor will have just over 40 days to prepare for the role -- less than a quarter of the time enjoyed by either Carney or his predecessor Mervyn King.
Bailey joined the banking regulator in 2016, following a distinguished career at the central bank, where he held roles including deputy governor, chief cashier, CEO of the Prudential Regulatory Authority and private secretary to BOE head Eddie George.
Before that he studied at the University of Cambridge, where he received a degree in history and a PhD in economic history.
The new governor will come into the role just as the U.K. economy enters another period of negotiation and uncertainty as it leaves the European Union on Jan. 31. Carney is due to step down that same day.
In addition to Brexit, the economic backdrop will also prove a challenge. Inflation is below target, and two of the BOE’s nine-member Monetary Policy Committee are currently calling for a rate reduction. Some economists expect a cut to be delivered in 2020.
There could also be a push for a move in the other direction, though that all hinges on Brexit. Most policy makers have signaled that a smooth departure from the EU would likely open the way to a series of limited and gradual increases to restrain inflation.
It’s not known if anything more will be announced by the U.K. Treasury on Friday. After a decade of crisis fighting, central banks including the Federal Reserve and the European Central Bank are reviewing their monetary policy strategies, and it may be the U.K. government would like a similar exercise at the BOE.
Others who had been linked with the top BOE job included Kevin Warsh, an ex-Federal Reserve policy maker, and BOE deputy governors Dave Ramsden and Ben Broadbent.
--With assistance from Lucy Meakin.
To contact the reporter on this story: Jessica Shankleman in London at jshankleman@bloomberg.net
To contact the editors responsible for this story: Tim Ross at tross54@bloomberg.net, Paul Gordon
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