In the autumn there was some speculation that the next governor of the Bank of England might be a woman, and Dame Helena Morrissey – a woman with literally no experience of the banking sector – was confirmed to be on the shortlist. It was an appalling example of tokenism, and we posted a blog piece, An open letter to Sajid Javid, Chancellor of the Exchequer: Why Dame Helena Morrissey is unfit to become the next Governor of the Bank of England.
Yesterday Sajid Javid announced the new governor was to be Andrew Bailey, and that the decision to appoint him had been made before the general election. Maybe the government was concerned about the impact on the general election of a media storm about the job going to another person of penis? Javid said in his statement:
He [Andrew Bailey] was the “stand-out candidate in a competitive field” with both international standing and experience of running a large complex organisation.
We can but hope this is the first of a series of appointments – including those of cabinet ministers – which are not made on the grounds of gender. Although Philip Davies being appointed the first male Minister for Women & Equalities would be good. A piece in yesterday’s Times:
Sajid Javid has named Andrew Bailey as governor of the Bank of England, making him one of the most powerful unelected officials in Britain.
Mr Bailey, who has had a rough ride as chief executive of the Financial Conduct Authority since 2016, will take over from Mark Carney on March 16.
He was the “stand-out candidate in a competitive field” with both international standing and experience of running a large complex organisation, the chancellor said.
Mr Bailey, 60, was at the Bank of England for 30 years, where he rose to prominence resolving stricken banks and shoring up the system during the financial crisis before moving to the FCA. He has worked across monetary policy and financial stability and was a deputy governor before joining the conduct regulator.
Mr Javid said: “It is a tribute to his integrity that he emerged from the most serious crash in living memory with his reputation enhanced.”
However, his reputation has taken a bashing since he took over at the FCA. He has been accused of being slow to react to a number of financial scandals that left tens of thousands of people out of pocket. His critics have called him ponderous and weak.
Gina Miller, the anti-Brexit campaigner and wealth manager, said: “It’s absolutely scandalous — if you look at his record at the FCA and what has happened under his watch — to have someone like that now in charge of Bank. He intervened after things. If you look at all the things on his watch, the culture has been to do things at the very last minute.”
Others pointed to his career before the FCA, where financial scandals come with the job since it oversees 60,000 firms. At the Bank he was highly respected.
George Buckley, UK economist at Nomura, said: “It’s a good choice, a steady choice. It’s nice to see they’ve chosen someone for their capacity to do the job as opposed to whether they are a supporter or not of the government.”
Mr Bailey, 60, said that he was honoured to take over from Mr Carney “particularly at such a critical time for the nation as we leave the European Union”.
The governor plays almost as important a role for household finances as the government. He is in charge of committees that set interest rates and oversee financial stability. He can determine the cost of borrowing, ration mortgages, demand that banks withhold dividend and bonus payments and put them into resolution.
The Bank operates independently of the government and Mr Javid was keen to stress that its independence would be protected following political attacks on Mr Carney during the Brexit referendum and afterwards.
The announcement was symbolically made in the same room that Gordon Brown revealed in 1997 that the Bank would be given operational independence. Mr Javid said: “It is critical that the governor is independently minded and that the institution makes whatever decision it feels necessary without any interference whatsoever from any politician.”
Mr Bailey had been selected by the Conservatives before the election was called but delayed making the appointment until today.
Mr Carney, 54, has agreed to stay on an extra month and a half, from January 31 to March 15, to ensure that there is an “orderly transition”, the chancellor said. He thanked Mr Carney for his “distinguished six and a half years of service”. The Treasury will now begin a search for a new FCA chief executive.
Mr Bailey will be paid a basic salary of £495,000 — more than Mr Carney’s £480,000 but a smaller overall package because Mr Carney received an additional £250,000 living allowance. At the FCA Mr Bailey’s basic salary was £449,000 and he received a bonus of £68,000 last year.
Mr Bailey will get no bonus at the Bank and he has taken a less generous pension than Mr Carney. He beat several serious contenders to the top job, including a number of women. [J4MB emphasis]
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