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The City's top regulator, Hector Sants, is quitting as chief executive of the Financial Services Authority.
Sants, who oversaw the nationalisation of Northern Rock, the bailouts of Lloyds Banking Group and Royal Bank of Scotland and a rapid increase in successful prosecutions of insider dealers on the stock market, will leave in the summer after three years in the job.
His departure comes at a time when the whole future of the FSA is deeply uncertain. The Conservatives under leader David Cameron and Shadow Chancellor George Osborne plan to move the regulator under the auspices of the Bank of England.
FSA insiders said that could make it difficult to find an immediate full-time replacement for Sants, with Jon Pain, the current managing director of supervision, tipped to be interim chief executive and eventually becoming a Deputy Governor of the Bank of England under the Tory plans.
Sally Dewar, managing director of risk at the FSA, is also tipped for promotion under the new structure. Sants was paid £623,000 last year.
Sants's departure also comes at an awkward time for the City as he has been central to the global negotiations over new banking regulation which are due to be finalised before the G20 meeting in Seoul this autumn.
Sants is widely seen as having been a powerful voice for the City against the scale of reforms being put forward by President Obama's administration in the US.
A senior source at the FSA told the Evening Standard: “Hector always said that he would do the job for three years. He told the board two weeks ago and the Treasury was informed last week.”
He dismissed claims that the departure left FSA staff dismayed: “Whatever the future most of them know they will still have jobs.”
Sants, 54, is expected to take a sizable period of gardening leave once he leaves. But the former UBS and Credit Suisse senior executive will have no shortage of job offers from the City.
However, some people suggest that he may see a future in politics. He is said to be good friends with both Cameron and Osborne and could be drafted into a future Conservative government.
Sants has been an outspoken head of the FSA, telling the City it had to clean up its act and ensure that the people at the top of major financial firms had the necessary skills and knowledge to run complex organisations.
Jonathan Davies, Regulatory Partner at City law firm Reynolds Porter Chamberlain LLP said: “Taken with the Conservatives' threat to break up the FSA, Hector Sants's resignation risks the regulator being viewed as a lame duck.
“This is not the environment in which the future of financial services regulation can be left hanging in the balance for months, it risks sowing too much confusion. The financial services industry needs a period of regulatory stability and this isn't going to help.”
The FSA chief today described his time at the financial watchdog as “extraordinary” and added: “I believe the FSA candidly examined the failings in financial regulation that contributed to the onset of the crisis, learned the lessons and has gone on to reform itself into a much stronger and better-equipped organisation.”
Reader views (8)
The FSA just another useless organisation that should be closed down, what have they exactly done for the taxpayer.?
- Mr S.Port, London, 10/02/2010 13:02
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Sants is an overpaid pen pusher from the FSA who will,undoubedly, make a smooth transition into a highly paid city job. Another incompetent who is over rewarded for total incompetence.This man has joined the ranks of those who have not only failed to regulate where necessary, but driven perfectly decent people out of business. TCF is a joke, it means "treating chums fairly" and little else.
- Miguelm, West London, UK, 09/02/2010 19:09
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Under Mr Sants' leadership it is plain to see the FSA continued its regulatory authority with its eyes closed and ears plugged.
Lets not forget no one from his previous employers appeared miffed by his departure.
He has continued to appoint colleagues to senior positions who have the ability to grab headlines for successes that don't rank but seek to hide when the going gets tough.
The problem with the FSA is that its staff mean well but are managed at the highest levels by sychophants and appointees of the CEO those who never had nor actually have a clue
It's a collection of the blind leading the blind. (Deepest apologies to those of short or no sight)
From Lord Turner's ignorant comments re socially useful work, and making the FSA a political puppet of an ignorant, economically incompetent government to creating a rulebook so cumbersome no one has a clue what route to follow.
Not forgetting a total lack of appreciation of how the Banking and Insurance and Stock markets actually work!!
If Mr Sants is a friend of Messrs and Cameron and Osborne there would have been no reason for him to jump ship using the contract was coming to an end line if he didn't already know he going to be pushed later.
One can only hope he is not the first to go and that Turner and the madness of demented, inexplicable regulation ends and plain speaking, easy to understand useful all encompassing regulation returns.
Goodbye Mr Sants the end of a dire period goes with you.
- Robert Marshall, LONDON, 09/02/2010 17:04
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Let's abolish the FSA and leave the banks to regulate themselves, after all they've shown themselves so capable of doing so over the past few years.
- John Buckeridge, London, 09/02/2010 17:01
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Hector Sants has done a very good job in the dire circumstances he was thrown into. The only issue anyone in the city has with him is how on earth he promoted Sally Dewar (a glorified secretary and totally out of her depth on many issues) and the bane of jokes, to the position of managing director of risk?
- Liz, London, 09/02/2010 15:07
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An ideal time to disband the FSA - an outrageously expensive Quango which managed to let the gathering storm of the recession pass it by almost unnoticed. Regulation under the Bank of England was thorough, considerably less expensive and didn't depend on the patronage of Gordon Brown.
- Tom Williams, Oxford UK, 09/02/2010 13:57
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Not another failure in politics!
- Mj, East Anglia, 09/02/2010 13:42
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Not up to the job.
- Tojo, Hythe,Kent, 09/02/2010 11:55
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