The current head of the UK’s prudential financial regulator will take the reins at the Financial Conduct Authority (FCA) later in the year, the Treasury has announced.

Andrew Bailey has been chief executive of the Prudential Regulation Authority (PRA) since its foundation in 2012. The PRA is responsible for the prudential regulation of some 1,700 banks, investment firms, insurers and deposit takers.

Now he takes on a much larger remit as chief executive of the FCA, which is responsible for regulating the conduct of some 70,000 firms, as well as for the prudential regulation of all financial services firms that fall outside the PRA’s remit.

The Chancellor of the Exchequer, George Osborne MP, said:

“Andrew Bailey is the outstanding candidate to be the next Chief Executive of the Financial Conduct Authority and I am delighted that he has agreed to lead it.

“We have cast the net far and wide for this crucial appointment and, having led the Bank of England’s response to the financial crisis, Andrew is simply the most respected, most experienced and most qualified person in the world to do the job.”

John Griffith-Jones, Chairman of the FCA, commented:

“I am delighted that Andrew has been appointed as the new Chief Executive. He brings unrivalled regulatory experience, a proven track record and an excellent reputation in the UK and internationally. Having been an FCA Board member since 2013 he has been fully engaged with all the regulatory issues that we have faced in recent years and in setting our strategy for the future.”

Acting FCA chief executive Tracey McDermott will continue in the role until Mr Bailey starts work at the FCA, which will be when his role at the PRA has been filled. This is expected to occur in July 2016.

Ms McDermott was initially tipped to become the permanent CEO, until she announced in December 2015 that she did not wish to be considered as a candidate. It is now unclear if she will remain with the FCA after the summer, with her former role as director of enforcement now being carried out by Megan Butler, who is on a secondment from the PRA that lasts until September 1 2016.

Other names linked with the FCA top job included Greg Medcraft, chairman of the Australian Securities and Investments Commission; Xavier Rolet, CEO of the London Stock Exchange Group; Mark Branson, CEO of Switzerland’s Financial Market Supervisory Authority; and Charles Roxburgh, Director General – Financial Services at the Treasury.

It remains to be seen how much of a change there will be in the FCA’s approach under its new boss. For now, all of the regulator’s rules and guidance remain unchanged. Mr Bailey has revealed that he was approached about the vacancy and did not apply for it, and has said he will not be following the “shoot first and ask questions later” approach that his predecessor at the FCA, Martin Wheatley, once promised to adopt.

At the same time, the FCA announced the appointment of four new non-executive directors:

• Ruth Kelly, who held a number of Cabinet and other ministerial posts in the last Labour Government, including Economic & Financial Secretary to the Treasury; and who has held a number of senior roles at HSBC
• Bradley Fried, chairman of the bank of England’s Audit & Risk Committee and a former CEO of Investec
• Baroness Sarah Hogg, lead independent director of the Treasury
• Tom Wright, CEO of charity Age UK

They replace Sir Brian Pomeroy, Amanda Davidson and Mick McAteer.

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