Outgoing Governor of the Bank of England Mark Carney (L) and incoming Governor Andrew Bailey (R) at a press conference announcing an emergency rate cut last week to deal with the coronavirus crisis (Peter Summers)

London (AFP) – Andrew Bailey, who takes the reins of the Bank of England on Monday, has the typical profile of a central banker but is dogged by his controversial record as the country’s top financial watchdog.

Bailey was the continuity choice when in December then finance minister Sajid Javid, who has since left that role, selected him to succeed Canadian Mark Carney as BoE governor.

The 60-year-old begins his term at a fraught moment, amid a severe financial downturn prompted by the coronavirus pandemic and with the impact of Brexit on the British economy still uncertain.

Despite an abundance of qualified competitors for the top job, Javid said he was the “standout candidate” in the contest to succeed Carney, who became BoE head in 2013.

“Without question, he is the right person to lead the bank as we forge a new future outside the EU,” Javid said at the time.

Analysts said Bailey appeared a safe pair of hands.

“Having previously worked at the bank in various guises for over 30 years, Bailey can be considered an insider with outside experience,” said Paul Dales, of Capital Economics.

However, he has attracted criticism for lax oversight during his recent three and-a-half years as head of the Financial Conduct Authority (FCA), the watchdog for Europe’s largest financial sector.

Ahead of becoming the BoE’s 121st governor its 325-year history, Bailey told MPs this month that his FCA posting had been “very tough” but that he did not regret having taken it on.

– Financial crisis role –

Cambridge-educated Bailey began his career as a researcher at the London School of Economics, where his wife Cheryl Schonhardt-Bailey is a professor of political science.

The father-of-two, a native of the central English city of Leicester, then went on to work at the Bank of England in various posts between 1985 and 2016.

He played a crucial role during the global financial crisis a decade ago and a subsequent vicious recession, overseeing its special operations to help troubled banks.

In a 2012 interview with the Financial Times, he reflected on the bailout four years earlier of the crippled Royal Bank of Scotland.

The then RBS treasurer had come into his office “and I thought he was going to have a heart attack… and he looked at me and said I need £25 billion today, can you do it?” Bailey said, according to the FT. 

“I said ‘Yes, I can do that,'” he recounted. 

The newspaper said the RBS official “looked shocked at Mr Bailey’s cool confidence, but what he did not know was that Mr Bailey had already done the same thing for HBOS”.

– Contentious period –

In 2016, Bailey became head of the FCA — entering a more contentious period in his career.

He has been heavily criticised for his performance, particularly following the collapse last year of a flagship investment fund run by the money manager Neil Woodford.

During his tenure the FCA also suffered from several other financial scandals that tarnished his reputation, including the bankruptcy of London Capital & Finance, which sold high-yield bonds that turned out to be high-risk. 

Businesswoman Gina Miller, an advocate of greater transparency in finance, has demanded an independent review into Bailey’s BoE appointment, calling his FCA record a “toxic cocktail of negligence, incompetence and indifference”. 

Her “True and Fair Campaign” released what she called a “damning dossier” on his track record there and questioned if he was “a fit and proper person” to be the next BoE head.

But Bailey was approved by parliament’s treasury committee, which concluded he has “the professional competence and personal independence to be appointed”.

Its head Mel Stride noted the committee “also raised a number of serious concerns regarding the performance of the FCA both before and during his time as its CEO”.

Disclaimer: Validity of the above story is for 7 Days from original date of publishing. Source: AFP.