Bailey gets top job in the new bank watchdog
TOP regulator Andrew Bailey was yesterday named as head of the incoming Prudential Regulatory Authority (PRA) and deputy governor of the Bank of England, posts which give him major new powers over banks.
Bailey is currently head of the prudential business unit within the Financial Services Authority (FSA) and used to be chief cashier at the Bank.
The powers of the post mean Bailey will face a grilling by MPs on the Treasury Select Committee ahead of starting the new role in April.
The FSA is being split into the Financial Conduct Authority and the PRA. The PRA is designed to promote stability in the financial sector, ensuring banks are allowed to fail safely rather than causing widespread damage.
Bailey will monitor banks’ capital buffers, and whether they are well run.
Those powers mean he can set standards for banks and supervise how they are run, looking to reduce risks in their operations.
The position also gives Bailey a seat on the Financial Policy Committee, judging when bubbles are building in financial markets and altering capital requirements to dampen any dangerous movements.
“I am very honoured to have been chosen for this role and excited to see the PRA taking shape,” Bailey said.
“There have been important and painful lessons from the crisis and we must ensure that the UK has a successful system of financial regulation”
Treasury Select Committee chairman Andrew Tyrie MP warned that “the size of the task facing Mr Bailey should not be underestimated”.
“His leadership will be instrumental in shaping a much-needed cultural change at the regulator, moving away from the failed box-ticking exercises of the FSA towards more judgement-led
regulation,” said Tyrie.