UK central bank plays it safe with chief

Incoming governor, after decades at the institution, will be tested by Brexit

The building housing the Bank of England in London's financial district is traditionally known as the Old Lady of Threadneedle Street, and in the new year there will be a new man in charge of the United Kingdom's central bank.

As Canadian Mark Carney prepares to step down from one of Britain's most significant non-political roles before completing the full run of his eight-year term, his successor as the bank's 121st governor has been named.

With the possibility of Brexit causing even more turbulent political and economic waters than those of the economic crisis a decade ago, the powers that be have decided to follow the bank's first overseas appointee with someone who is very much in-house, its former chief cashier Andrew Bailey.

The 60-year-old was the early favorite for the post, having spent more than 30 years working at the bank, and is currently head of the Financial Conduct Authority, or FCA, the financial watchdog.

He will take over in March, rather than at the end of January as initially planned, with Carney overseeing a handover period. Bailey saw off competition from the likes of Minouche Shafik, director of the London School of Economics, to secure the role.

Bailey's appointment was welcomed by Chancellor of the Exchequer Sajid Javid and also Carney, who called his successor "an extraordinary public servant".

"Andrew brings unparalleled experience, built over three decades of dedicated service across all policy areas of the bank," Carney said.

Carney drew criticism from Brexit supporters for suggesting that Britain's departure from the European Union, one of the first major challenges Bailey will face, would cause "a major challenge".

With Bailey's appointment having been made so soon after the result of a general election this month that finally firmed up Brexit as a political event - after more than three years of uncertainty - Javid welcomed him as "the standout candidate in a competitive field … he is the right person to lead the bank as we forge a new future outside the EU and level-up opportunity across the country".

Keith Skeoch, the CEO of fund manager Standard Life Aberdeen, welcomed Bailey as a "safe pair of hands on the tiller" going into what could be a challenging time.

He praised Bailey's "breadth of experience and expertise, both within the bank and across the financial sector", adding that he will "take over the reins at a tricky time given the range of uncertainties which seem likely to dominate the monetary and financial policy debate in 2020 and beyond".

Labour's shadow chancellor John McDonnell, however, called Bailey's record at the FCA "less than inspiring" and said he would "need to demonstrate early that he appreciates the need to address the deep structural problems of our economy".

Although widely seen as a safe choice, with huge in-depth knowledge of how the bank operates, Bailey's professional resume from his period at the FCA is not without its talking points. In particular, its handling of the Royal Bank of Scotland's Global Restructuring Group, drew criticism.

Established to help transform the fortunes of small businesses, the FCA instead came under fire for allegedly asset-stripping customers. An FCA inquiry into the affair recommended no further action be taken, a decision described by Kevin Hollinrake, the co-chair of the All-Party Parliamentary Group on Fair Business Banking, as "another complete whitewash and another demonstrable failure of the regulator to perform its role".

Also, the FCA admitted it would need to look at its own rules following the decline and eventual recent closure of the Woodford Equity Income fund, which left many investors badly out of pocket.

Bailey called achieving the top job at a place he had spent so much of his life "a tremendous honor".

"The bank has a very important job and, as governor, I will continue the work that Mark Carney has done to ensure that it has the public interest at the heart of everything it does," he said.

On Brexit, the first major challenge on his desk when he takes over, Bailey has advocated close coordination between British and European financial regulators to make any future transitions and longer-term relations as cordial as possible.

As chief cashier, Bailey's signature appeared on every banknote printed in the country, testifying to the value of the British currency. In a sense, his new role will do something similar.