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MNI POLICY: Andrew Bailey Appointed As Next BOE Governor

MNI (London)
-Bailey Takes Office March; Will Be In Place For That Month's MPC Meet
-Bailey Has No Track Record On Monetary Policy 
-Career To Date In Financial Stability/Regulation  
By David Robinson
     LONDON (MNI) - Andrew Bailey has been appointed as the next Governor of the
Bank of England, Chancellor of the Exchequer Sajid Javid confirmed Friday.
     Bailey has built his reputation on the financial stability and regulatory
wings of the Bank and has no monetary policy track record, having never sat on
the Monetary Policy Committee. He will take over on March 16, ahead of that
month's meeting. 
     The following are points about him and his appointment:  
     -Bailey was one of the names on the shortlist of candidates approved by the
Treasury based selection committee, entailing that he met all the requirements
for the job and he is widely perceived to be the safe choice. 
     He will have a confirmation hearing with the cross party Treasury Select
Committee, which is headed by Conservative former Financial Secretary to the
Treasury, Mel Stride. Bailey, who has frequently given evidence to the TSC and
is the consummate insider, should be well placed to get through the committee's
     -Bailey, who joined the BOE in 1985, is not an economist by education,
having studied history before completing a doctorate in economic history. 
     He does, however, having some experience on the Bank's economic wing,
having at one time headed up its International Economic Analysis Division,
although he made his name over the decades on dealing with financial stability,
banking crises and detailed regulation.
     -He was promoted to Deputy Governor, Prudential Regulation in April 2013
and the reconfiguration of the UK's financial regulatory architecture saw him
shift to being Chief Executive Office of supervisory body the Financial Conduct
Authority on July 1.
     A string of relatively small, at least by recent standards, financial
scandals have bedevilled his tenure at the FCA. The most recent headline
grabbing one was over the suspension of a popular Woodford fund, an event which
highlighted a gap in the UK rules under which funds could hold relatively
illiquid assets while being marketed as if instant redemption was possible.
     The BOE moved this week to announce it was pushing for reforms to close
this loophole, forcing fund managers to either stipulate that there would be
longer redemption or that there would be specific haircuts on assets.
     Bailey can expect questioning on the BOE seemingly belated response at his
TSC hearing, along with questions over the relationship between the FCA and the
     It was revealed this week that the FCA is probing the use of an apparent
security breach involving a third party's low latency audio feed at BOE press
conferences, which was aimed at giving subscribers a competitive advantage while
Governor Mark Carney and colleagues answered questions.
     Bailey is now set to takeover as BOE Governor while the body he currently
heads probes the Bank, raising questions about the relationship between the two.
     -With Bailey having no background in monetary policy setting and never
having been free, as an insider, to express his own views on it publicly there
is little to glean about his likely future voting pattern.
     The fact he is not a technical economist, however, suggest that the
analysis of the monetary policy wing under Deputy Governor Ben Broadbent will
tend to hold sway, rather than being challenged by a heterodox outsider. 
--MNI London Bureau; tel: +44 203-586-2223; email:
[TOPICS: M$B$$$,M$E$$$,M$$BE$]
MNI London Bureau | +44 203-865-3812 |
MNI London Bureau | +44 203-865-3812 |

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