Shadow chancellor John McDonnell has raised questions over the appointment of Andrew Bailey, the current chief executive of the Financial Conduct Authority (FCA), as the new governor of the Bank of England.
Mr McDonnell cited a string of “scandals” as he called on Chancellor Sajid Javid to postpone Mr Bailey’s installation in office until an independent inquiry into “these failures of financial regulation has taken place”.
Speaking during Commons Treasury questions, he accused Mr Bailey of being “asleep at the wheel during his period of office at the FCA”, adding Labour had already called for a “short, sharp inquiry into the recent scandals and into the regulation of the financial services sector”.
He said: “It is hugely important it goes to the right qualified person and any reasonable person that looks at Mr Bailey’s track record, his track record of public service, outstanding public service will see that he is eminently qualified.”
Mr McDonnell said: “During Mr Bailey’s tenure as chief executive of the Financial Conduct Authority, we saw the scandals of London Capital & Finance, the Woodford Equity (Income) fund and the continuing saga of the RBS’s global restructuring group, in which all of those scandals many, many people, many on low incomes were hit extremely hard.
“Can I ask the chancellor, did he consult any of the victims of these scandals before he appointed Mr Bailey?”
He added: “On the question of the Woodford group, from the filings lodged today at Companies House, it’s reported that £13.8 million of dividends were received by Mr (Ian) Woodford and his chief executive in the 12 months leading up to the crisis that engulfed Woodford investment management and affected so many investors deleteriously.
“This adds to the concerns already expressed by others that Mr Bailey was asleep at the wheel during his period of office at the FCA. Labour has already called for a short, sharp inquiry into the recent scandals and into the regulation of the financial services sector.
“Could I suggest to the Chancellor, that would it be appropriate to postpone Mr Bailey’s installation in office until an independent inquiry into these failures of financial regulation has taken place.”
“We are of course interested to make sure that an inquiry takes place and that we learn all the necessary lessons. I believe the economic secretary has a meeting with the FCA precisely on this issue again tomorrow, but we will let the inquiry take its course independently and once the inquiry is complete we will make sure all necessary lessons are learned.”
