Bank of England governor ‘shocked’ by Mandelson Epstein leaks

The Governor of the Bank of England said he was “shocked” by the revelation that Lord Mandelson leaked sensitive government information to Jeffrey Epstein during the 2008 financial crisis, and said it was true that the matter was being investigated by the police.

Andrew Bailey made the comments as he paid tribute to the late former chancellor Alistair Darling, drawing a stark contrast between Darling’s behavior during the crisis and the former business secretary’s allegations.

Asked if there were enough safeguards to prevent those in positions of power from misusing information affecting the market, Bailey said there was a “very clear” legal framework to deal with potential breaches and that Mandelson’s allegations should have been handled by law enforcement.

He also insisted that the focus should be on Epstein’s victims, asking: “How is it possible that we live in a society that this happened and was allowed to happen?”

Bailey appeared emotional as she thought about the photos showing Mandelson by Darling’s side during the tragedy. He described Darling as someone who had acted “honestly and modestly” while helping steer the UK through one of the worst financial shocks in modern history.

“Alistair Darling was doing all the right things,” Bailey said. “He was acting with complete sincerity, and he can’t speak for himself today, sadly.”

Darling died in November 2023 at the age of 70.

The comments follow reports that Mandelson informed Epstein of the Labor government’s decision to freeze bankers’ bonuses after the financial crisis and that he wanted to persuade the Treasury to abandon the policy. This revelation led to a police investigation.

Bailey said he was “shocked by what we heard at the time”, reiterating that the priority should be the harm suffered by Epstein’s victims rather than the reputation of those involved.

The Bank of England governor has previously come under scrutiny for circling Epstein for his role as head of the Financial Conduct Authority when the regulator investigated Jes Staley, the former chief executive of Barclays, over his relationship with the disgraced financier.

Staley unsuccessfully challenged the FCA’s decision to bar him from senior financial services roles, with the court upholding the regulator’s finding that he acted in bad faith by misleading it about the nature of his contacts with Epstein. While the ban was upheld, the court reduced the fine imposed on Staley.

That case centered on a trove of emails between Staley and Epstein, some of which later became public and added to broader concerns about accountability and ethics at the highest levels of finance and government.