Britain’s financial watchdog has a new boss – former head of the Bank Of England’s Prudential Regulation Authority, Andrew Bailey.
He takes over the post at the head of the Financial Conduct Authority (FCA) from interim chief executive Tracey McDermott who is leaving the regulator for pastures new.
She had been in charge since previous chief executive Martin Wheatley was ousted by Chancellor George Osborne last year.
He has had to hit the ground running as he takes over at a particularly volatile time for the UK’s financial sector with the country facing some of the most difficult economic and constitutional challenges in a generation.
As well as the challenges forced by Britain’s decision to leave the EU, he will also be responsible for delivering the long awaited report into the way banks have investigated the PPI scandal and announcing the date for the proposed claims deadline.
Mr Bailey was Chancellor George Osborne’s personal choice for the job, as he was considered ‘a safe pair of hands’ to take over the top job after a six month search for Martin Wheatley’s replacement. Tracey McDermott ruled herself out of taking the job on, preferring to leave the organisation altogether.
The 57 year old is a career central banker who was chosen to head up the Prudential Regulation Authority when it was formed after the former Financial Services Authority (FSA) was disbanded in the wake of the financial crisis of 2008. As the new head of the FCA he will be responsible for overwatch on 70,000 financial businesses throughout the UK.
Business as usual
FCA chairman John Griffith-Jones stresses the work of the regulator will be ‘business as usual’. He says: “We at the FCA will continue to do our day job. We will not be thanked for taking our eye off the ball, particularly with our responsibilities for day-to-day regulation of the markets.
“It will be a top priority for my board and Andrew Bailey as he starts work as our CEO to keep ourselves fully aligned with the ultimately chosen direction of travel.”
Mr Bailey’s appointment has been met with favourable comment by industry observers.
Barney Reynolds of Shearman and Sterling, says: “The FCA’s role going forward will change quite considerably, and it’s important to get the relationship with Europe right.”
Paul Sharma, a former colleague at the PRA, says: “He will have to concentrate on capital markets.
“Whatever his plans on the consumer protection and retail side, I don’t think he will get much time to look at it. The exigencies of the moment will be pushing him in the direction that actually best fits his character and proficiency.”
The publication of the FCA’s report on the banks’ investigation of the PPI scandal has already been postponed from Spring and is now expected in the Autumn.
It arises from an FCA thematic review into PPI and the way in which the banks have investigated the millions of PPI claims, which have so far resulted in compensation of £24.2 billion since January 2011.
Industry experts believe there are still billions of pounds more to be paid out because millions of people who may be eligible to make a claim have not yet done so.
The banking industry has been pushing for a deadline on claims so they can finally draw a line under what has become one of the biggest financial scandals in British history. It is suggested the deadline will come into force two years after it is announced and anyone who has not made a claim by that date will lose the right to do so forever.
The announcement of the deadline date is expected to launch a deluge of new claims with consumers rushing to register their claims before time finally runs out.
The banks have already set aside an additional £9.53 billion to pay future successful claims, but when they added £7.6 billion to the pot earlier in the year they also said they could not be sure whether or not even more might be required.
Time will tell.