Bailey (pictured) will leave the bank after 30 years of service to head up the City regulator, but will remain in his post until his successor has been appointed. He will become a member of the PRA Board and the Financial Policy Committee.
The announcement follows weeks of speculation on who the new CEO will be, with both interim chief executive Tracey McDermott and former Ofcom boss Ed Richards ruling themselves out for the position.
Bailey will take over from McDermott who has been acting as chief executive following Martin Wheatley’s departure from the regulator last year. According to reports, Wheatley was ousted by Chancellor George Osborne after he refused to renew his membership to the FCA’s board.
Bailey will bring almost three years’ experience as the CEO of the PRA, a role which saw Bailey have overall responsibility for the prudential regulation and supervision of around 1,700 banks, building societies, credit unions, insurers and major investment firms.
The role also included overseeing the introduction of new rules on capital for banks and insurers, new rules on banker remuneration and the introduction of stress-testing on major UK banks.
Before it was abolished in 2013, Bailey served at the Financial Services Authority and has been a member of the FCA board since it was established in April 2013.
Bank of England governor Mark Carney described Bailey as ‘an extraordinary public servant’.
“During his career, he has worked across all of the Bank’s policy areas, combining leadership and innovation to deliver consistently the Bank’s policy objectives. His work in helping to manage the crisis and then to develop the post-crisis regulatory framework has been exemplary.
“I admire his commitment to ensuring the UK’s financial system serves its real economy and I look forward to continuing to work closely with him in future.”
Since Wheatley left in September, top City executives have expressed the need for a regulatory boss with experience in financial services and a good understanding of the UK regulatory environment.
Bailey said that ‘recent developments’ had made the need for stable leadership at the FCA the most important issue in UK financial services at present.
“Although it had not been my intention to leave the PRA during my term as CEO, a job that I enjoy enormously, it is a great honour to have been asked by the Chancellor to take on the job of FCA CEO,” he said.
“After a lot of thought I have decided to move and do all that I can to make the FCA effective and successful. My intention is to move once a successor is found for the PRA, and while I will of course not be involved in that process, it matters greatly to me that it provides for the successful future of the PRA.”
