Andrew Bailey has been named as the chief executive of the Prudential Regulation Authority (PRA).
The Treasury confirmed Bailey has been appointed as deputy governor of the Bank of England with responsibility for prudential regulation, starting on 1 April.
Chancellor George Osborne said: "Andrew Bailey has the right skills and experience to lead the PRA as it moves into the new era of judgement-led supervision.
"Putting the Bank of England in charge of prudential regulation is at the heart of the government's reforms to regulation of financial services."
He added the PRA would be a tough, forward-looking regulator focused on the stability of banks and insurers.
Bailey will also be a member of the Court of Directors and a member of the Financial Policy Committee.
He joined the FSA in April 2011 as deputy head of the prudential business unit and director of UK banks and building societies.
In July 2012, he became managing director of the prudential business unit, with responsibility for the prudential supervision of banks, investment banks and insurance companies.
The Financial Services Act created a third deputy governor position at the Bank of England. The new deputy will become the boss of the PRA and will be responsible for guiding its regulatory decisions and ensuring "that it is established as a credible and effective regulator", the Treasury said in a statement.
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