One of the first tasks of the new Treasury committee will be to scrutinise Andrew Bailey

When the cross-party Treasury committee is officially appointed on Monday, one of its first tasks will be to question Andrew Bailey over his role as the next governor of the Bank of England, which he is due to start on 16 March.

This is standard procedure for the influential group of MPs, but comes at a time of great challenge for an incoming governor, not least amid the unfolding economic collapse caused by the coronavirus outbreak.

Bailey, who replaces Mark Carney and was chosen as his successor in December by the former chancellor Sajid Javid, will face several urgent tasks in his opening weeks and months as governor to address – as well as some potentially awkward questions. Here are some of the key subjects the committee is likely to quiz him on.

His record

When Bailey was appointed he was widely hailed as a “safe pair of hands”. However, critics of his time at the Financial Conduct Authority beg to differ. Gina Miller, the businesswoman best known for her legal challenge to the government’s attempt to push through Brexit without parliamentary approval, is leading a group calling for a review of Bailey’s appointment and has welcomed the Treasury committee’s opportunity to examine his record.

Miller has highlighted his reaction to the collapse of investments run by London Capital & Finance, and the liquidation of Neil Woodford’s once-popular flagship investment fund, among other things.

“The hundreds of thousands of Britain’s depositors, savers, investors and pensioners whose lives have been ruined and savings squandered, on Mr Bailey’s watch as CEO of the Financial Conduct Authority, deserve no less,” Miller said.

Bailey has argued on many of the issues that the FCA’s statutory powers were limited. However, the scandals have overshadowed his time at the regulator.

Coronavirus

There are questions about how much the Bank can do to support the economy given the global nature of the coronavirus outbreak and the limited firepower central banks have at their disposal to combat an economic downturn.

Bailey arrives with interest rates still close to the lowest levels in the Bank’s 325-year history, at 0.75%, only 0.25 percentage points higher than when Carney started at the Bank almost seven years ago and limiting the scope for further cuts if deemed necessary. Whether Bailey will be able to make much of an inroad into returning rates to more normal levels will be closely watched.

Brexit

The British economy could be put under renewed strain later this year as the Brexit negotiations gather pace ahead of the deadline for the UK’s exit from the transition period at the end of December, which Boris Johnson has warned he will not extend.

Once the dust from the coronavirus outbreak has settled, the path for interest rates and the continued stability of the financial system will partly depend on the nation’s new trading relationship with the EU, and the extent to which there are tougher barriers, friction at Britain’s borders and whether there is a smooth or abrupt transition.

Carney had been accused of bringing the central bank’s independence into question, given his repeated warnings about the threat posed by Brexit to the UK economy and banking system.

Serving under the government of Boris Johnson, the new governor could face more questions about Britain’s future relationship with the EU.

Climate

As governor, Mark Carney brought to the top of the agenda the importance of global heating as a problem for central bankers to address, warning about the existential crisis facing the world financial system.

Threadneedle Street is preparing to run a “catastrophic” climate-related stress test next year, a landmark moment. Bailey will need to show early on that he will take the issue as seriously as his predecessor.

Hedge fund scandal

Bailey is likely to face questions about the embarrassing revelation about a backup audio feed that without the Bank’s knowledge potentially allowed traders early access to an audio feed of market-moving Bank press conferences.

The answers to those questions could have broader implications for how the Bank protects key national infrastructure, amid criticisms of where accountability lies for failures at the institution.

Diversity

Bailey is set to become the 121st governor – and the 121st man to take the role. That imbalance is mirrored throughout the top levels of the Bank, with a lack of gender or ethnic diversity in top jobs.

There is only one woman, Silvana Tenreyro, on the Bank’s nine-member rate-setting monetary policy committee. Across the Bank Bailey will be pressured to close ethnicity and gender pay gaps, as well as increase representation, which sometimes went backwards during Carney’s tenure.

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Independence

The Bank of England is run at arm’s length from the government to preserve its independence at setting interest rates and producing economic forecasts. As the government expands its spending – boosting the economy – the Bank of England may feel the need to raise interest rates to stop inflationary pressures building. That could bring the Bank into conflict with the government and Johnson’s choice as chancellor, Rishi Sunak.

How Threadneedle Street and Downing Street work together will be a key question of Bailey’s regime – and potentially his legacy as governor.