The Financial Conduct Authority (FCA) has announced the successor to interim CEO Tracey McDermott.

Andrew Bailey, who currently heads the Prudential Regulation Authority (PRA), will become the City’s regulator-in-chief once a replacement is found for his existing role.  

Andrew, who is also Deputy Governor of the Bank of England, has been appointed for a five-year term.

George Osborne, Chancellor of the Exchequer, said: “Andrew Bailey is the outstanding candidate to be the next chief executive of the Financial Conduct Authority, and I am delighted that he has agreed to lead it.”

“We have cast the net far and wide for this crucial appointment and, having led the Bank of England’s response to the financial crisis, Andrew is simply the most respected, most experienced and most qualified person in the world to do the job.”

The Chancellor added that the appointment was an important step in the establishment of the FCA as a strong regulator.

“The government is determined that the financial sector operates to the highest standards,” said George Osborne.

“Anyone who has dealt with Andrew knows he will be tough but fair, and understands the flaws and merits of the sector better than anyone.

“Simply, I am confident that he will ensure that our financial services industry is the best regulated in the world.”

John Griffiths-Jones, Chairman of the FCA, said he was delighted to have Andrew on board.

“He brings unrivalled regulatory experience, a proven track record and an excellent reputation in the UK and internationally,” said John.

“Having been an FCA Board member since 2013 he has been fully engaged with all the regulatory issues that we have faced in recent years and in setting our strategy for the future.

“He has done a great job at the PRA and he will build on the work the FCA has done over the last three years as a strong, independent regulator.”

Meanwhile, Haydn Lightfoot, Associate Partner at Crossbridge, a consultancy focusing on financial services, said the appointment was necessary as a new approach to regulation was needed.

“Andrew Bailey will need to navigate a complex stakeholder map if he is to be successful in developing a banking environment that is attractive to banks whilst rebuilding the UK public’s perception of the banking industry,” said Haydn. 

“Perhaps most critically, however, Andrew Bailey will have to ensure the FCA itself maintains the highest standards.

“As internal documents connected with the banking culture review were recently leaked, the focus that maintaining these standards will require has never been clearer.”

Andrew succeeds Tracey McDermott, who has acted as interim CEO since Martin Wheatley stepped down from the post in September 2015.