James Moore: Andrew Bailey as FCA chief is a masterstroke from George Osborne

With the conduct regulator of the world’s biggest financial centre (by some measures) in the midst of a profound crisis, Chancellor George Osborne has pulled a rabbit out of his hat.

Appointing Andrew Bailey to run the Financial Conduct Authority is close to being a masterstroke.

You do rather wonder how on earth he pulled it off, short of getting down on his hands and knees in Bailey’s office and saying “please, please, please”.

The FCA has problems. Its previous boss Martin Wheatley was elbowed out, in part because the banks really didn’t like him. He was seen as being too tough.

It has since faced accusations of having succumbed to undue influence from the Treasury in dropping an investigation into banking culture, at a time when the Treasury has been making a rather obvious attempt to make nice with the City.

Those accusations have been denied, but they would still have made it tough for the Chancellor to appoint one of his civil servants, such as head of financial services Charles Roxburgh, to the role.

Appointing someone from the City might have proved a similarly tough sell. Not to mention the fact that they don’t come cheap.

The boss of Australia’s securities regulator Greg Medcraft and Mark Branson, who runs Switzerland’s Finma, have been mentioned. But it would take time for them to get

up to speed, and to grips with the role’s political tightrope.

Bailey has none of those problems. He helped set up the FCA, and sits on its board. He is liked and respected by the banks, even if they don’t always like what he’s done to them in terms of capital requirements.

But that just adds to his store of credibility. He’s even agreed to take a slight pay cut.

I’m told he took what could be described as the toughest job in the City because he believed it was the right thing to do. That’s extremely rare in British public life. If there is a downside for Osborne, it’s this: Bailey will continue to do what he feels is right. He certainly won’t be bullied.

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