MPs have raised serious concerns about a City watchdog run by the incoming Bank of England chief, following a string of scandals.
Members of the Commons Treasury select committee said it was satisfied that Andrew Bailey had “the professional competence and personal independence” for the top job of governor.
However, they warned that they would be keeping a close watch on the Financial Conduct Authority (FCA), which Mr Bailey had headed since 2016.
In a short report, the committee said it had “a number of serious concerns about the culture and operations of the Financial Conduct Authority and the industry that it regulates”.
Campaigners led by businesswoman Gina Miller have called for a review into Mr Bailey’s appointment after accusing him of a “toxic cocktail of negligence, incompetence and indifference” while at the watchdog.
Mr Bailey gave evidence to MPs earlier this week where he set out his priorities and reflected on problems at the FCA.
He said of his time at the agency: “I’m proud of what we’ve achieved, I’m not proud of some of the things that happened during my time. We’re not going to hide anything in terms of what’s going on.
“The FCA is a very different organisation. There is more to be done but there will always be more to be done in an organisation like the FCA.”
Treasury committee chairman Mel Stride MP said: “The Treasury committee has approved Andrew Bailey’s appointment, but it has also raised a number of serious concerns regarding the performance of the FCA both before and during his time as its CEO.
“Many of these concerns – specifically around culture, transparency and insufficient speed of action – will remain a key focus for the committee.
“The committee is clear that it has an important role in improving the performance of the FCA.”
It will be holding pre-appointment hearing with the incoming chief executive of the FCA.
Mr Bailey was in charge of the FCA during a series of scandals including the collapse of mini-bond provider London Capital & Finance; the failure of peer-to-peer lenders Lendy and FundingSecure; and the demise of Neil Woodford’s investment fund.
The new governor, who takes over from Mark Carney on 16 March, has defended his position, pointing out that during his four years at the regulator, he widened it remit instead of just focusing on the largest financial firms.
But the True and Fair Campaign – set up by Mrs Miller and her husband Alan in 2012 – is demanding the new Chancellor Rishi Sunak reviews his appointment, arguing he is “not a fit and proper person”.
Mrs Miller, best known for leading successful Brexit-related legal challenges against the government, claims during Mr Bailey’s time in charge, the FCA failed to protect consumers and investors.
She argues him becoming the BoE governor role would be “a textbook example of rewarding failure”.
The FCA has strongly refuted the True and Fair Campaign claims.