Andrew Bailey has been appointed as the next governor of the Bank of England.
Mr Bailey, aged 60, is currently chief executive of the Financial Conduct Authority (FCA), the City watchdog.
He will become the 121st governor of the Bank of England on 16 March, taking over from Mark Carney, and will serve a full eight-year term.
The search for the new governor began in April and Mr Bailey, who spent more than 30 years at the Bank, was seen as an early favourite for the job.
However, the FCA has faced criticism in recent months over its regulatory scrutiny of the flagship fund of one of the UK's best known money managers, Neil Woodford. The fund was suspended in June and eventually closed, with investors expected to lose large sums of money.
In addition, the FCA's report into Royal Bank of Scotland's treatment of small business by its controversial restructuring division was called a "whitewash" after it recommended taking no further action against the bank.
Five things the Bank of England does
- It sets the official interest rate, which determines the cost of borrowing money
- It supervises the financial system, seeking to ensure it is stable and no banks are running out of cash
- It acts as the government's bank and a lender of last resort in times of financial difficulty
- It issues the UK's banknotes (coins are issued by the Royal Mint)
- It stores the UK's gold reserves, as well as those of other central banks
Announcing the decision to appoint Mr Bailey, Chancellor Sajid Javid said he was "the stand-out candidate in a competitive field".
"He is the right person to lead the Bank as we forge a new future outside the EU and level-up opportunity across the country," he added.
Accepting the role, Mr Bailey said it was "a tremendous honour" to be chosen.
"The Bank has a very important job and, as governor, I will continue the work that Mark Carney has done to ensure that it has the public interest at the heart of everything it does."
CBI chief economist Rain Newton-Smith congratulated Mr Bailey, saying: "His strong experience, both in Threadneedle Street and at the Financial Conduct Authority, means he is particularly well placed to steer the British economy through the new course it will take after Brexit and through challenging global economic times."
But shadow chancellor John McDonnell was critical of the appointment, saying: "As an establishment figure with what some consider is a less than inspiring record at the FCA, Andrew Bailey will need to demonstrate early that he appreciates the need to address the deep structural problems of our economy and, like Mark Carney, understands the climate change threat."
Mr Carney had been due to step down on 31 January, but has now agreed to stay on until 15 March in order to provide for a smooth transition.
Mr Carney described Mr Bailey as "an extraordinary public servant".
"Andrew brings unparalleled experience, built over three decades of dedicated service across all policy areas of the Bank," he said.
The decision means hopes that the Bank could have been led by a female governor for the first time in its history have been dashed.
Minouche Shafik, a former member of the Bank of England's interest rate-setting committee, had been hotly tipped for the role.
Mr Bailey has spent almost the entirety of his career at the Bank of England, which he joined in 1985.
He has held a number of roles including chief cashier, which meant that his signature appeared on all bank notes issued by the Bank of England.
Mr Bailey was chief cashier during the financial crisis when, he recalled in an interview: "The [RBS] treasurer, John Cummins, came in and I thought he was going to have a heart attack... and he looked at me and said: 'I need £25bn today, can you do it?'. I said: 'Yes, I can do that'."
Mr Bailey was also a deputy governor and head of the Bank's prudential regulation division, before joining the FCA as its chief executive in 2016.
Andrew Bailey was the early frontrunner for one of the most powerful positions in the UK.
However, his time as head of the City watchdog, the Financial Conduct Authority, was peppered with a number of high-profile controversies - including its handling of complaints into RBS's treatment of small businesses in the aftermath of the financial crisis - which many thought might have harmed his chances for the top job.
He is highly thought of by colleagues and civil servants.
Former Permanent Treasury Secretary Lord McPherson described him as the most able and competent Bank of England official he had ever worked with, adding that while Bailey would not make waves for the government he had the backbone to stand up to it.
Mr Bailey, who will be paid £495,000 a year, is taking over at a fraught time for the Bank of England.
It emerged this week that an audio feed of sensitive market information from the Bank had been leaked to fund managers.
The Bank admitted one of its suppliers had "misused" the feed which gave traders early access to information that could potentially generate large sums of money.
The matter has been referred to the FCA, which Mr Bailey currently leads.
The City watchdog said it was "looking at the issue".
PA reported that the prime minister's official spokesman, when asked whether Brexit was a factor in Mr Bailey's appointment, said: "The way it works is the chancellor recommends candidates to the PM, the PM then advises the Queen."
When pressed on the issue, the spokesman added: "I just went through the process and the prime minister thinks he will do an excellent job."