Bank of England deputy governor Andrew Bailey has been appointed the new chief executive of the Financial Conduct Authority (FCA), the UK’s top financial markets regulator.

Bailey (pictured) will replace former FCA chief Martin Wheatley who was removed by UK Finance Minister George Osborne last year — a move that raised concerns among politicians about the strength of the FCA’s independence.

Wheatley had taken a stern approach approach to regulating the City of London financial sector and the behaviour of some of its traders and investment bankers.

Bailey currently runs the Prudential Regulation Authority (PRA), the UK central bank’s banking supervisory division.

It could be some time before the Bank of England finds a replacement for Bailey — and only then will he take up his new role at the FCA.

“Andrew will continue to fulfil the full functions of his role as deputy governor and PRA CEO, including his international commitments, until his departure from the bank,” said the Bank of England in a statement.

Bailey will remain in post “until his successor has been appointed, with the exact date of his departure to be confirmed in due course.”

The FCA has been run on an interim basis by Tracey McDermott since last September, but she did not want the chief executive job.

Osborne said he had searched internationally for candidates to be the new FCA chief.

McDermott will continue as interim chief at the FCA until a replacement for Bailey at the Bank of England has been found.

Bailey said: “The new system of financial regulation in the UK depends for its success on both conduct (FCA) and prudential (PRA) regulators achieving their objectives given by Parliament.

“Recent developments have shown that the most pressing issue in the system right now is the need for stable leadership at the FCA.

“Although it had not been my intention to leave the PRA during my term as CEO, a job that I enjoy enormously, it is a great honour to have been asked by the chancellor to take on the job of FCA CEO.”