New City watchdog chief thinks he's got some work to do, and the Brexit vote hasn't helped

Hayley Kirton
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Chancellor George Osborne Opens The Prudential Regulation Authority
Photograph of Andrew Bailey taken during the Osborne years (Source: Getty)

The new boss of the City watchdog has today revealed he thinks he has his work cut out for him.

Speaking in front of the Treasury Select Committee, Andrew Bailey, chief executive of the Financial Conduct Authority (FCA), said "the place needs to be run effectively and tightly".

"It's an organisation that has taken a battering," he said later, although he also noted he felt positive that the staff members he had inherited were determined and capable.

Referring to a questionnaire Bailey had filled out ahead of the meeting, chair of the committee Andrew Tyrie said it indicated the new boss felt the FCA had made some "quite serious mistakes" and had some "quite serious shortcomings" in the past.

Bailey, who has been in his role for about three weeks, also noted the UK's financial sector's bartering power had been somewhat diminished since the 23 June vote.

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"We have to recognise that our ability to advance UK agendas has diminished," said Bailey. He later added the FCA had set up an internal unit which would be staffed with around a dozen people to help the organisation navigate the Brexit fallout.

Bailey added that worries about where EU nationals in the UK stood had extended to the financial services sector and many in the industry "have shared the view that they have had to do quite a bit of reassurance of their staff".

The vote also lead to many asset managers suspending trading on their property funds, and Bailey told the committee he thought the FCA had a role to play in ensuring the properties held by these funds were not disposed of in an irresponsible manner.

Read more: Carry on complying, says City watchdog to financial sector

"We've got to take a view on the treatment," said Bailey, pointing out that the FCA had already issued some guidance relating to the issue.

However, he did not slam the suspension mechanism itself, instead likening it to a "safety valve".

Today's meeting marks Bailey's first appearance before the influential Treasury committee since he took up his role earlier this month.

Before that, he was chief executive at the Prudential Regulation Authority and Bailey said today he was not actively looking for another job when he was asked to take over at the FCA.

Bailey took over the reins of the City watchdog from Tracey McDermott, who had been keeping the seat warm as an interim boss.

Read more: The FCA’s new broom must act fast to revive confidence in the regulator

McDermott herself stepped into the role after Martin Wheatley was ousted from the role last year and shocked many in January when she revealed she had taken her name out of the running for the permanent position.

However, things could have been different if McDermott had not stood down, as Bailey told the committee he would not have wanted to run for the role if she was still a candidate.

The committee members suggested Bailey may have been handed the position because he had previously lobbied against red tape for the financial industry, such as the Senior Managers' Regime. Bailey strongly denied these allegations.

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