Go to the Globe and Mail homepage

Jump to main navigationJump to main content

A general view of the Bank of England, seen, in the city of London, Wednesday, Aug. 12, 2009. (Alastair Grant/AP)
A general view of the Bank of England, seen, in the city of London, Wednesday, Aug. 12, 2009. (Alastair Grant/AP)

Andrew Bailey named Bank of England’s deputy governor Add to ...

The Treasury named Andrew Bailey on Tuesday as a Deputy Governor of the Bank of England and chief executive of the bank’s new prudential regulation authority (PRA) from April 1.

Bailey is head of prudential supervision at the Financial Services Authority and was expected to be confirmed in the new job. The FSA will be scrapped at the end of March when the PRA becomes Britain’s main banking and insurance supervisor.

The revamp is part of the country’s attempts to draw a line under supervisory failures in the run up to the 2007-09 crisis that forced Britain to take a controlling stake in Royal Bank of Scotland and a large minority stake in Lloyds Banking Group PLC.

“Andrew Bailey has the right skills and experience to lead the Prudential Regulation Authority as it moves into the new era of judgement-led supervision,” Chancellor George Osborne said in a statement.

The Bank, which will be led by Canadian Mark Carney from July, becomes one of the most powerful central banks in the world when it takes on its new prudential supervisory role.

It is also home to the new Financial Policy Committee, on which Bailey sits, to set the direction for supervision.

Bailey’s immediate challenge is to decide how much extra capital and restructuring RBS and Lloyds will need so they can be fully returned to the private sector.

Prime Minister David Cameron said on Tuesday he wanted changes at RBS to be accelerated.

It will be a tricky balancing act for Bailey as the government will want to make sure the banks can plug any capital gaps themselves and not depend on taxpayers again.

Last week, Bailey said the financial crisis has moved on from its early, prudential phase when the focus was on topping up capital at banks.

Supervisors are now having to deal with the second phase – the misconduct coming to light such as the Libor and loan insurance misselling scandals – at a time when regulators are still “building architecture” responding to prudential issues.

Bailey will be Deputy Governor for Prudential Regulation.

Hector Sants, then chief executive of the FSA, was due to fill the role and head up the new PRA but last year resigned to become head of compliance at Barclays.

Report Typo/Error

Next story




Most popular videos »

More from The Globe and Mail

Most popular