Andrew Bailey's had to deal with an unprecedented economic and public health crisis on day one of his new job.
When it was announced in December that Andrew Bailey would succeed Mark Carney as governor of the Bank of England, no one could have predicted what would await him when he finally sat at his desk in March.
That is, assuming he has had the time to sit. Those who listen to Bailey’s speeches can attest to his ability to stand for very long periods. This may be just as well, given the economic emergency he now faces.
Formerly CEO of the UK’s Financial Conduct Authority, a financial regulatory body, Bailey is a leader of international standing with expertise across monetary, economic and regulatory matters. His new role is perfectly suited to a man who is famously cool under pressure; he was said to have been the steadiest under fire (by a long shot) during the financial crisis of 2008.
Bailey is also no stranger to the Bank of England, having held a number of positions there—including executive director for Banking Services, chief cashier, head of the bank’s Special Resolution unit, head of the International Economic Analysis Division in Monetary Analysis and even the coveted role of the governor’s private secretary.
In addition to his responsibility for maintaining monetary and financial stability and ensuring that financial institutions are safe and sound, it was initially thought that Bailey’s key focus as bank governor would be tackling the departure of the UK from the EU, or Brexit, while steering the economy through already challenging times.Then came COVID-19.
As this issue goes to print, the Bank of England became the latest central bank to announce further stimulus measures amid the widening coronavirus shock, cutting interest rates to 0.1% (very much considered the lower bound) and introducing further quantitative easing of an unexpectedly large $234 billion.
All of this came following the announcement by the bank and HM Treasury, the UK’s economic and finance ministry, of a commercial-paper purchasing plan, designed to keep the market for short-dated nonfinancial corporate debt functioning. The hope is to prevent a wave of firms from overburdening the banks.
If this is what can be achieved in just a few days of Bailey’s tenure, the potential for his eight-year term is tremendous. With the situation changing on a daily basis, and worse likely to come, the new governor is unlikely to get that chance to sit down anytime soon.
