UPDATE 2-Andrew Bailey firm favourite to head Bank of England -FT

Former Bank of England deputy governor Andrew Bailey, one of the City of London's most experienced financial regulators, is the firm favorite to be named as the new governor of the British central bank, the Financial Times reported on Thursday.

Bailey, 60, worked for 30 years at the BoE before moving in 2016 to his current job as chief executive of the Financial Conduct Authority which is charged with cracking down on misconduct in the finance industry. Finance minister Sajid Javid was expected to announce the choice of who will replace Mark Carney as the BoE's new governor on Friday, the FT said.

A spokesman for Britain's finance ministry declined to comment on the report. Britain has delayed the appointment of a new BoE governor since last year with the country focused on Brexit - the impact of which remains a big challenge for the central bank - and then an election won by Prime Minister Boris Johnson last week.

Carney, a Canadian, is due to stand down on Jan. 31. Another former BoE deputy governor, Minouche Shafik, was no longer in the running while Shriti Vadera, chair of Santander UK, and former Federal Reserve policymaker Kevin Warsh, were out of contention too, the FT said.

Gerard Lyons, who was an economic adviser to Johnson while London mayor, was considered to have fallen short of the requirements of the job but still had an outside chance of getting it, the newspaper said. Lyons is well known for his pro-Brexit views which are unusual among professional economists.

Johnson rejected Shafik because of her critical views on Brexit, the FT said. Bailey was deeply involved in shoring up the British banking system during the global financial crisis while at the BoE, and he remains a familiar face to the U.S. Federal Reserve and other central banks around the world.

Other roles included helping the BoE to contain the fallout from the collapse of Barings in the late 1980s and participating in the introduction of a new currency in war-torn Iraq in 2003. He has also served as the BoE's chief cashier. In his current job at the FCA, Bailey has been criticized for not publishing in full a report into alleged misconduct by bank RBS. Bailey cited privacy restrictions.

His chances of getting the BoE job were seen to have been further dented after the demise of the Woodford equity fund which was popular with retail investors. Bailey has said the FCA was limited in what it could do by European Union rules. The FT said current BoE deputy governors Ben Broadbent and Jon Cunliffe were still hopeful they might get the top job.