UK names Bailey to head central bank prudential watchdog
By Huw Jones
LONDON (Reuters) - Britain named veteran Bank of England official Andrew Bailey on Tuesday to head its new banking regulator just a month before he must present a plan to help two partly state-owned banks to become independent.
Bailey will become a deputy governor of the Bank of England and chief executive of the bank's new prudential regulation authority (PRA) from April 1.
He is already head of prudential supervision at the UK's Financial Services Authority and was expected to be confirmed in the new job. The FSA will be scrapped at the end of March when the PRA becomes Britain's main banking and insurance supervisor.
The revamp is part of the country's attempts to draw a line under supervisory failures in the run-up to the 2007-09 financial crisis that forced Britain to take a controlling stake in Royal Bank of Scotland (RBS.L: Quote) and a large minority stake in Lloyds (LLOY.L: Quote).
"Andrew Bailey has the right skills and experience to lead the Prudential Regulation Authority as it moves into the new era of judgment-led supervision," UK finance minister George Osborne said in a statement.
The Bank of England, which will be led by Mark Carney from July, becomes one of the most powerful central banks when it takes on its new prudential supervisory role. It is also home to the new Financial Policy Committee, on which Bailey sits, to set the direction for supervision.
Bailey's immediate challenge is to present a plan in March to the FPC outlining how much extra capital and restructuring RBS and Lloyds may need so they can each stand on their own two feet. Prime Minister David Cameron said on Tuesday he wanted changes at RBS to be accelerated.
It will be a tricky balancing act for Bailey as the government will want to make sure the banks can plug any capital gaps themselves and not depend on taxpayers again. Continued...