Andrew Bailey, who will replace Mark Carney as the Bank of England governor, must roll his eyes every time he sees the phrase “safe pair of hands”. It comes to the fore almost whenever his name appears after 30 largely incident-free years at the Old Lady of Threadneedle Street.
But his reputation has come under scrutiny since he quit as deputy governor in 2016 to become the finance industry’s consumer watchdog.
A series of investment scandals at the Financial Conduct Authority left him looking out of touch and indecisive. Last month, FCA staff were accused of verbally abusing catering teams and defecating on toilet floors. This summer at the regulator’s annual meeting he was forced to admit that FCA rules were so complex that even its staff suffered from confusion.
The 60-year-old was responding to criticism over the collapse of London Capital & Finance, which has entered the annals of City scandals after more than 11,000 investors lost £236m. The FCA’s enforcement team was warned three years earlier about the company but failed to act.
This blot on his record and his modest demeanour meant he was understood to be out of the running under the previous chancellor Philip Hammond, who wanted to follow up Carney’s appointment with a similarly respected international figure.
However, the current chancellor, Sajid Javid, judged that Bailey’s experience as a regulator would help him now that the Bank has a dual role: setting interest rates to manage inflation and oversight of the City to prevent a repeat of the 2008 financial collapse.
Bailey, who was educated at Wyggeston grammar school for boys in Leicester, from where he went to Queens’ College, Cambridge to study history, was jokingly referred to by Carney as “the big sexy turtle” for his considered decision-making being akin to the mating of Galapagos tortoises. This reputation means he is likely to maintain the Bank’s position on interest rates of slow and incremental increases.
He is not a macroeconomist and has not been a member of the monetary policy committee, which he will chair and meets eight times a year to set interest rates. Yet his previous roles at the Bank include private secretary to the governor and leading the international economic analysis division in monetary analysis, a technical job that provides the information needed to set interest rates.
