Article 4WZJQ The Guardian view on the Bank of England: new boss, new thinking? | Editorial

The Guardian view on the Bank of England: new boss, new thinking? | Editorial

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Editorial
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Brexit, climate change and the next recession mean central banking is in danger of becoming a failed paradigm that needs replacing

The appointment of Andrew Bailey as governor of the Bank of England is a safety-first move. The central banker knows his way around the City and it is reasonable to assume that he can stand up for the finance sector in the coming years of tough negotiations with Brussels. Mr Bailey has made a point of saying that Britain, home to Europe's largest financial centre, must not become a "taker" of EU rules after it leaves the bloc. Tellingly, he is viewed by former Treasury chiefs as "one of us". But is this enough, given the age we live in? The last three Bank of England governors have been big figures on the international stage, with the incumbent, Mark Carney, being a central banker whose words move markets. Mr Bailey, for all that he is an insider's insider, is not in the same mould. Britain ducked its chance to hire such a transformational figure, which is strange given what lies ahead. We are all born with imperfect foresight, but there are three dangers to the country's economy clearly visible on the horizon: Brexit, climate change and the next recession. We know next to nothing about Mr Bailey's thoughts on how to deal with these.

Since 2016 Mr Bailey has run the City watchdog, the Financial Conduct Authority. While his predecessor fined banks billions of dollars for trying to rig interest-rate benchmarks and foreign exchange markets, Mr Bailey took a softly-softly approach to the City. A key review into banking culture seen as core to restoring trust in banks disappeared with this new outlook. Earlier this month, a representative of victims of a City mini-bond scandal walked out of a meeting with Mr Bailey, accusing the FCA of not holding to account the financial firms it regulates under his stewardship. Whistleblowers say he failed to investigate alleged wrongdoing in high-street banks. He also was criticised by MPs for allowing banks "to continue to rip people off" when the regulator's review of high-cost credit fell short of capping onerous rates. The view is that he backed the City over the consumer.

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