© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
February 19, 2013 12:57 pm
Andrew Bailey has been appointed the head of the Bank of England’s new financial regulator as the central bank prepares for a dramatic expansion of its powers.
In a widely expected move, Mr Bailey will become chief executive of the Prudential Regulation Authority, the new arm of the BoE tasked with maintaining the “safety and soundness” of Britain’s banks, building societies and insurance companies.
Britain’s new regulatory regime, created in the wake of the financial crisis, will vest an unprecedented amount of power in the central bank and nearly double the size of its staff.
Mr Bailey will start his new role when the PRA formally comes into existence on April 1. He will also become the central bank’s deputy governor for prudential regulation and will be eligible for the same annual salary of £258,809 as the other two deputy governors, the BoE said.
He has worked at the BoE since 1985 and is currently “on loan” to the Financial Services Authority, where he heads prudential supervision and leads planning for the PRA, including the transfer of staff from the FSA to the PRA’s new office in Moorgate. The PRA will add about 1,300 staff to the BoE’s existing workforce of about 1,800.
With a good reputation in both Westminster and the City, Mr Bailey has been the obvious choice to head the PRA since Hector Sants, former head of the FSA, quit last year.
Mr Bailey, who is 53, has also been the central bank’s executive director for banking services, the chief cashier (which means his signature is on many bank notes), and the head of the BoE’s Special Resolution Unit, created in February 2009 as the central bank grappled with the banking crisis.
The House of Commons’ treasury committee said it would hold an appointment hearing for Mr Bailey in March. Andrew Tyrie, the committee’s chair, said the size of Mr Bailey’s task “should not be underestimated”.
“His leadership will be instrumental in shaping a much-needed cultural change at the regulator, moving away from the failed box-ticking exercises of the FSA towards more judgment-led regulation,” he said.
Mr Bailey said he was “honoured to have been chosen for this role and excited to see the PRA taking shape”.
He added: “We have a big job ahead to ensure the UK has a stable financial system made up of banks, insurers and investment firms able to support activity in the economy and the needs of the public.”
The PRA will be responsible for the safety and soundness of financial institutions while the Financial Conduct Authority will be responsible for regulating institutions’ conduct in retail, wholesale and financial markets.
In an interview with the Financial Times last year, Mr Bailey said the PRA would be forward-looking and would focus on a limited number of big issues.
Banks and insurers “will see a different model of supervision” in which the PRA will target the issues that the regulators believe pose the biggest threats to their institutions, he said.
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.