With rather unfortunate timing, he is set to take up his new job on April 1, the date on which the PRA will become responsible for the prudential regulation and supervision of banks, building societies credit unions and major investment firms. Taking over that part of its operations from the FSA, which will cease to exist at the same time.
The FSA may be about to pass into the annals of regulatory history, but it won’t be entirely forgotten - Bailey was most recently deputy head of prudential regulation there. The name over the front door may change, but the personnel within remain remarkably familiar. How many people are there who are qualified to do a highly technical job like this, after all?
Bailey, whose career began at the bank in 1985, was to have been deputy head of the PRA until Hector Sants bailed out of the FSA to become Barclays new chief enforcer. It’s an ill-wind and all that.
At the PRA Bailey will be in charge of making sure that banks don’t get over-leveraged and hold enough liquidity and capital to withstand economic shocks without recourse to state aid.
But he will also become deputy governor of the BoE, Mark Carney’s number two. Perhaps he will be the one who gets to show the new Canadian governor to his desk on his first day at work, show him where the loos are, and accompany him to the canteen at lunchtime? After all someone will have to do it.
Speaking of Carney the noises he has been making about more aggressive action to stimulate growth seem to have got the attention of some in the markets, albeit not perhaps the people he wanted to listen. Currency speculators and hedge funds have been merily shorting sterling for the past few days, and the pound has dropped against the dollar and the Euro as a result.
Not content with saying that he ‘s considering switching our folding money to plastic (the horror!), Carney’s also hinted that inflation targets may go out of the windon win the search for growth. Consequently many City types, who have been waiting for the pound to face its day of reckoning for some months now, think that the time is pretty much nigh.
By the time Christmas comes along sterling could have devalued so much that Santa wont be able to afford much in the way of imported presents…