One of the officials responsible for the bank ringfencing rules is being rewarded by the UK chancellor, George Osborne, by being appointed as a new deputy governor of the Bank of England.
Sam Woods is being promoted from his current role overseeing the insurance industry and replaces Andrew Bailey, who is being parachuted in to head the Financial Conduct Authority – the body that regulates the industry from a consumer standpoint.
Woods – who at 42 is considered one of the rising stars at the Bank – will takeover as head of the bank’s regulatory arm, the Prudential Regulation Authority (PRA), on 1 July on a five-year term.
Announcing the appointment the chancellor referenced Woods’ role on the Independent Commission on Banking (ICB), which devised the rules requiring a ringfence between high street and investment banking arms. Woods was ICB secretary between 2010 and 2011. Before that he was one of the founder members of UK Financial Investments, established to look after stakes in the bailed-out banks..
“Sam has been one of the architects of the government’s crucial reforms to financial regulation – playing a key role in the work of the Independent Commission on Banking,” Osborne said. “I believe Sam is the best person to ensure that these vital reforms he helped design will be a success and to deliver a strong, secure and globally competitive regime for all financial services.”
As the new head of the PRA, Woods will be in charge of the stress tests – annual health checks of banks – that are now part of the regulatory framework since the financial crisis. They are used to judge whether the biggest banks and insurance companies are strong enough to withstand market turbulence.
As a deputy governor of the Bank of England, the post also gives him a key position at the central bank. Woods said he was “absolutely delighted and very honoured” to be taking on the role which was created out of the regulatory overhaul of the City put in place by the coalition government after the May 2010 election. The PRA was put in charge of overseeing the financial strength of the major players in the City, with the FCA responsible for their relationship and behaviour with consumers.
The appointment was prompted by the gap at the top of the FCA – which Bailey was the surprise choice to fill – and forced by a Osborne’s decision six months ago not to renew the contract of Martin Wheatley, the first head of the new City watchdog.
Wheatley’s departure was interpreted as the chancellor taking a less aggressive approach to regulating the financial industry after a series of record-breaking fines. Filling the FCA role also stirred controversy after Osborne stunned the City by announcing in a radio interview in January that the lead internal candidate, Tracey McDermott, did not want the role full time. She has yet to say if she intends to remain at the FCA once Bailey takes over full time.
The son of diplomats, Woods was born in New Zealand and was educated in the UK. He joined the Bank in 2013 from the now defunct Financial Services Authority, which he joined in 2011 after ten years at the Treasury which led to his positions at UKFI and ICB. He worked in the private sector between 1995 and 2001 at Diageo and McKinsey.
Woods holds a British passport and is married to the FCA’s director of competition Mary Starks, with whom he has three children.
