Europe News

Andrew Bailey selected to replace Mark Carney as governor of the Bank of England

Key Points
  • Bailey, 60, is the chief executive of the Financial Conduct Authority (FCA), which regulates the financial services industry in the country.
  • Bailey is set to take over from Mark Carney at the start of February, becoming the 121st governor of the Bank.
VIDEO4:0904:09
Who is Andrew Bailey? FCA chief set to become new BOE governor

Andrew Bailey, the current head of the U.K.'s financial watchdog, has been named as the next governor of the Bank of England.

The news, first reported by the Financial Times late Thursday, was confirmed by the U.K.'s Finance Minister Sajid Javid on Friday morning.

"When we launched this process, we said we were looking for a leader of international standing with expertise across monetary, economic and regulatory matters. In Andrew Bailey that is who we have appointed," Javid said at a press conference Friday.

Bailey, 60, is the chief executive of the Financial Conduct Authority (FCA), which regulates the financial services industry in the country. Prior to joining the FCA in 2016, Bailey was the chief executive for the Prudential Regulatory Authority — another part of the U.K.'s central bank.

Bailey joined the Bank of England in 1985 and has worked in a number of areas, including as the executive director for banking services. Bailey is set to take over from Mark Carney on March 16, becoming the 121st governor of the Bank. He will be serving a full eight-year term.

VIDEO2:4202:42
Andrew Bailey named next Bank of England governor

Carney, who joined in 2013 and had to deal with the uncertainty and market turmoil caused by the 2016 Brexit referendum, was set to step down on January 31. However, Javid confirmed that Carney has agreed to stay in the post until March 15 for an orderly transition.

Javid thanked Carney for his work and contribution to the U.K. economy. "The intellect, rigor and leadership he brought to the role during a critical time was a significant contribution to the U.K. economy moving to recovery and growth," he told reporters.

Sterling is down more than 14% against the dollar since Carney took office in July 1, 2013.

"Mark Carney has overseen one of the most tumultuous periods in the U.K.'s political and economic history," Phil Smeaton, chief investment officer at Sanlam U.K., said in a note on Friday.

"Now however, Boris' (Johnson) newly revitalised government is set to being certainty to the U.K., boost fiscal spending on infrastructure and core public services, and allow business to unleash its pent up investment demand. Such a backdrop is a stark difference to the quagmire that Carney was forced to slog through, and though tackling the economic challenges of a departure from the EU is still the top priority for Andrew Bailey, he will also need to balance the inflationary risks against subdued global growth."

Andrew Bailey, chief executive officer of the Financial Conduct Authority (FCA).
Jason Alden | Bloomberg via Getty Images

Bank of England's security breach

More recently, the Bank of England has been criticized after it admitted that an audio feed of sensitive information had been leaked to high-speed traders.

On Thursday, following a report in The Times newspaper, the Bank said that a third-party supplier had "misused" the audio feed to give hedge funds early access to information. According to The Times, the supplier had sent the audio feed to traders who had access to a 5 to 8-second head start, as audio tends to be transmitted faster than video.

"This wholly unacceptable use of the audio feed was without the Bank's knowledge or consent, and is being investigated further," the central bank said in a statement Thursday, without naming the supplier.

The central bank held its main interest rate steady on Thursday at 0.75% with its rate-setting committee voting 7-2 in favor of keeping the current level.