The Treasury Committee has approved Andrew Bailey’s appointment as governor of the Bank of England (BoE) but said that the City regulator needs to improve.
Bailey (pictured) served as chief executive of the Financial Conduct Authority (FCA) from 2016 and will join the BoE on 16 March 2020.
He was in charge of the FCA during the collapse of peer-to-peer lenders Lendy and FundingSecure and mini-bond provider London Capital & Finance, as well as the gating of Neil Woodford’s investment funds.
Transparency campaigner Gina Miller recently published a report which demanded a review into his new appointment as BoE governor and cited Lendy’s collapse as a reason as to why the review should be held.
On Wednesday the committee of MPs questioned him about his time as FCA boss and whether he should be regarded as a safe pair of hands that can lead the BoE in a nimble way.
He was also asked about his shaping of the strategy and the priorities of the FCA when it came to issues such as London Capital & Finance, as well as his ability to tackle issues quickly given his previous actions at the FCA.
Bailey defended his tenure, arguing he helped to change the focus of the FCA when he joined, and that the regulator improved during his time at the helm.
The Treasury Committee concluded that Bailey has the professional competence and personal independence to be BoE governor.
However, it added that the issues during his reign included a number of serious concerns about the culture and operations of the FCA and the industry that it regulates. Bailey has promised to provide further evidence in response to these issues.
“The Treasury Committee has approved Andrew Bailey’s appointment, but it has also raised a number of serious concerns regarding the performance of the FCA both before and during his time as its chief executive,” said Mel Stride MP, chair of the Treasury Committee.
“Many of these concerns – specifically around culture, transparency and insufficient speed of action – will remain a key focus for the committee.
“The committee is clear that it has an important role in improving the performance of the FCA.
“We will be holding a rigorous pre-appointment hearing with the new chief executive to consider further the issues raised in yesterday’s session.”
The committee said it will look at the speed and transparency with which the regulator acts later in this year and will assess its progress in improving the culture of the finance industry.
“Our work will include assessing the effectiveness of the government in implementing its responsibilities in relation to the remit and powers of the FCA,” the committee said in its report of Andrew Bailey’s appointment.
“We are clear that there is a gap between public expectations and the current powers and performance of the FCA and clear in our duty to support the government and the institution of the FCA in a process of improvement.”
Last month, representatives of investors in Lendy and London Capital & Finance urged the government to give them a say on who the next boss of the regulator is.