The Governor of the Bank of England has said he was “shocked” by revelations that Lord Mandelson leaked sensitive government information to Jeffrey Epstein during the 2008 financial crisis, saying it was right that the matter is now being investigated by the police.
Andrew Bailey made the comments as he paid tribute to the late former chancellor Alistair Darling, drawing a sharp contrast between Darling’s conduct during the crisis and the alleged actions of the former business secretary.
Asked whether sufficient safeguards exist to prevent those in positions of power from misusing market-sensitive information, Bailey said there was a “very clear” legal framework for dealing with potential breaches and that it was appropriate for the Mandelson allegations to be handled by law enforcement.
He also stressed that the focus should remain on Epstein’s victims, asking: “How is it that we live in a society that this happened and was allowed to happen?”
Bailey appeared visibly emotional as he reflected on images showing Mandelson alongside Darling during the crisis period. He described Darling as someone who acted with “honesty and decency” while helping to steer the UK through one of the most severe financial shocks in modern history.
“Alistair Darling was doing all the right things,” Bailey said. “He was doing them with a thorough sense of integrity, and he can’t speak for himself today, sadly.”
Darling died in November 2023 aged 70.
The comments follow reports that Mandelson kept Epstein informed about the Labour government’s decision to cap bankers’ bonuses in the aftermath of the financial crash and that he had sought to persuade the Treasury to abandon the policy. The disclosures have triggered a police investigation.
Bailey said he was “shocked by what we heard about that period”, reiterating that the priority must be the harm suffered by Epstein’s victims rather than the reputations of those implicated.
The Bank of England governor has previously been drawn into scrutiny surrounding Epstein due to his role as head of the Financial Conduct Authority when the regulator investigated Jes Staley, the former Barclays chief executive, over his relationship with the disgraced financier.
Staley unsuccessfully challenged the FCA’s decision to ban him from senior financial services roles, with the court upholding the regulator’s finding that he had acted with a lack of integrity by misleading it about the nature of his links to Epstein. While the ban was maintained, the court reduced a financial penalty imposed on Staley.
That case centred on a cache of emails between Staley and Epstein, some of which later became public and added to wider concerns about accountability and conduct at the highest levels of finance and government.
