The Financial Conduct Authority finds itself in want of a chief executive for the third time in almost as many years following Andrew Bailey’s appointment as governor of the Bank of England.
An internal interim chief executive to replace Mr Bailey is likely to be announced early in the new year, according to people familiar with the situation, while the Treasury launches a formal recruitment process that will consider both internal and external candidates to head the watchdog, which has been rocked by a series of consumer-facing scandals.
Mr Bailey is due to begin at the BoE in mid-March, meaning the interim CEO could feasibly head the troubled watchdog for a large chunk of 2020, just as the UK is set to leave the EU and negotiate its post-Brexit future.
Top internal candidates for both the interim and permanent job include two of Mr Bailey’s trusted lieutenants: Megan Butler, its current head of supervision, who like Mr Bailey joined the FCA from the BoE; and Chris Woolard, the former mandarin who is now the FCA’s head of strategy.
Ms Butler has the advantage of being known by chief executives across the financial sector, while Mr Woolard is the FCA’s big-thinker-in-chief.
But the Treasury may be tempted to look externally after the game of musical chairs it has played with the BoE and FCA in recent years.
“There is no obvious successor on the horizon; the other FCA executives have zeal aplenty but not the skill of listening and achieving change through consensus,” said Simon Morris, a regulatory partner at CMS, the law firm. “The Treasury will likely look further afield for the next incumbent in one of the world’s hottest jobs in financial regulation.”
The FCA declined to comment.
Mr Bailey was parachuted into the FCA in 2016 by the then-chancellor George Osborne at another low-point in the FCA’s history. The watchdog’s morale was low after its previous CEO, Martin Wheatley, had been defenestrated for being too tough on banks. Mr Osborne then announced on the radio that the acting CEO, Tracey McDermott, would not be getting the permanent job without telling her first.
Since then, Mr Bailey has worked hard to improve the mood among the FCA’s 3,000 employees and has overseen the authority’s move from London’s Canary Wharf to new headquarters near the Olympic Park in Stratford.
His in-tray has been dominated by getting the FCA, UK regulations and the financial sector ready for Brexit. But the watchdog has been tripped up by consumer-facing mis-selling scandals, from the £236m collapse of London Capital & Finance, to the implosion of Neil Woodford’s flagship equity fund, which trapped more than £3bn of investor money.
For whoever succeeds Mr Bailey, those issues are not likely to disappear any time soon.